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Calculate the gross redemption yields

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Reference no: EM132516502

Short-term, one-year annual effective interest rates are currently 8%; they are expected to be 7% in one year time, 6% in two year time and 5% in three year time.

Calculate the gross redemption yields of 1-year, 2-year, 3-year and 4-year zero coupon bonds assuming the expectations theory explanation of the yield curve holds.

Reference no: EM132516502

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