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What is the price of a four-year bond

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Reference no: EM133013959

Question - We consider the following zero-coupon curve (compounded quarterly)

Maturity (years)

Zero-Coupon Rate (%)

1

4.00

2

4.50

3

4.75

4

4.90

Required -

a) What is the price of a 4-year bond with a $100 face value, which delivers a 6% annual coupon?

b) You hold the bond until maturity. What is the annual return rate of your investment?

Reference no: EM133013959

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