Use the bootstrap method to calculate all zero rates

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1. 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.

2. Given the bonds in Problem 7, what is the price of a 3 year 5% coupon bond? What is its yield?

*Assume that all bonds have a par (face) value of $100, Also assume that all coupon bonds pay annual coupons, and that a coupon payment has just been made (unless otherwise noted)

Reference no: EM13894206

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