Calculate the prices

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Reference no: EM132759209

Question - Here is a table of effective annual spot rates:

Time (yrs)

1

2

3

4

5

Rate (%)

2.0

2.4

2.6

2.7

2.8

a) Calculate the prices of the 1,2,3,4, and 5 year zero coupon bonds that correspond to these rates.

b) Find the price of a 5 year, $10,000 face value bond with an annual coupon rate of 2.5%.

Reference no: EM132759209

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