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You have entered into a forward contract with the following parameters: Bond: 15 year, zero coupon bond Issuance: Will be issued in 1 year Face

You have entered into a forward contract with the following parameters:

Bond: 15 year, zero coupon bond
Issuance: Will be issued in 1 year
Face Value: $1000
1 year spot rate: 2 pct.
10 year spot rate: 4 pct.

A) Forward price = $544.59

B) Forward price = $533.91

C) Forward price = $566.37

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