The treasury plans to issue a 2-year maturity 9 coupon bond, Ask an Expert

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The Treasury plans to issue a 2-year maturity, 9% coupon bond that'll pay coupons once per year. The face value of the bond is 100. The yield-to-maturity on 1-year zero-coupon bonds is currently 7%. The yield-to-maturity on 2-year zeros is 8%.

Assuming that the expectations theory of the yield curve is correct; what is the market expectations of the price that the bond will sell for next year?

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Financial Management, Finance

Category:- Financial Management
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