Bootstrap method to calculate all zero rates

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Reference no: EM13890236

a) The price of a 1-year zero is $96.00, the price of a 2-year 10% coupon bond is $107.30 and the price of a 3-year 8% coupon bond is $102.25. Use the bootstrap method to calculate all zero rates.

b) Given the bonds in (a), what is the price of a 3 year 5% coupon bond? What is its yield?

Reference no: EM13890236

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Bootstrap method to calculate all zero rates : a) The price of a 1-year zero is $96.00, the price of a 2-year 10% coupon bond is $107.30 and the price of a 3-year 8% coupon bond is $102.25. Use the bootstrap method to calculate all zero rates. Given the bonds in (a), what is the price of a 3 year..

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