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You have estimated spot rates as follows: r1=5.00%,r2=5.40%,r3=5.70%,r4=5.90%,r5=6.00%. a. What are the discount factors for each date (that is, the present value of $1 paid
You have estimated spot rates as follows: r1=5.00%,r2=5.40%,r3=5.70%,r4=5.90%,r5=6.00%. a. What are the discount factors for each date (that is, the present value of $1 paid in year t )? (Do not round intermediate calculations. Round your answers to 3 decimal places.) b. Calculate the PV of the following $1,000 bonds assuming an annual coupon and maturity of: (i) 5%, two-year bond; (ii) 5%, five-year bond; and (iii) 10\%, five-year bond. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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