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You have a two-year zero coupon bond that pays $1,000 which price today is $591.716. You have a two-year coupon bond with a principal value
You have a two-year zero coupon bond that pays $1,000 which price today is $591.716. You have a two-year coupon bond with a principal value of $1,000 and coupon rate of 10%. Its price is $737.844. Determine what is the term structure of interest rates for years 1 and 2. Draw the curve.
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