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You have estimated spot rates as follows: ri = 6.30%, r2 = 6.70%, r3 = 7.00%, r4 = 7.20%, r5 = 7.30%. a. What are
You have estimated spot rates as follows: ri = 6.30%, r2 = 6.70%, r3 = 7.00%, r4 = 7.20%, r5 = 7.30%. a. What are the discount factors for each date (that is, the present value of $1 paid in year 6)? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Year Discount Factors 1 2 3 4 5 b. Calculate the PV of the following $1,000 bonds assuming an annual coupon and maturity of : (i) 6.3%, two-year bond; (ii) 6.3%, five-year bond; and (iii) 11.3%, five-year bond. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Present Value b-i. b-ii 6.30%, two-year bond 6.30%, five-year bond 11.30%, five-year bond b
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