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What is the implied one-year interest rate

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You observe a one-year discount US Treasury bond in the market with the following characteristics: Face Value of $100 and Price of $91.

1. What is the implied one-year interest rate?

2. You also observe a 2-year US Treasury bond selling at par with the following characteristics: Face value of $1,000 and annual coupon of 10%.

What is the implied one-year Treasury rate for the second year?

Reference no: EM133117093

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