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You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i = 4% compounded

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You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i = 4% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the inters rate on this bond will be 4%, what will the price of this bond be in 25 years? |

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