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You have estimated spot rates as follows: r1=6.40%,r2=6.80%,r3=7.10%,r4=7.30%,r5=7.40%. What are the discount factors for each date (i.e., the present value of $1 paid in year
You have estimated spot rates as follows: r1=6.40%,r2=6.80%,r3=7.10%,r4=7.30%,r5=7.40%. What are the discount factors for each date (i.e., the present value of $1 paid in year t)? Calculate the PV of the following $1,000 bonds assuming annual coupons and maturity of: (1) 6.4%, two-year bond; (2) 6.4%, five-year bond; and (3) 11.4%, five-year bond
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