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The following is a list of prices for zero-coupon bonds of various maturities.

Maturities (years)

Price of Bond ($)

1

957.2

2

931.35

3

948.01

4

725.72

(a) Calculate the forward rates for one-year bonds to be delivered in one, two, and three years.

(b) Calculate the forward rate for a two year bond to be delivered in one year (2f1).

(c) Calculate the price of an 8% coupon bond that pays annual coupons. This coupon bond has a maturity of four years.

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  • Category:- Basic Finance
  • Reference No.:- M91548250
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