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What is the price today of a? two-year

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Reference no: EM133111753

Assume the? zero-coupon yields on? default-free securities are as summarized in the following? table:

Maturity (Years)

1 Year

2 Years

3 Years

4 Years

5 Years

Zero Coupon Yields

6.1%

6.6%

6.8%

7.2%

7.4%

What is the price today of a? two-year, default-free security with a face value of $1,000 and an annual coupon rate of 5%?? (Round to the nearest cent)

Does this bond trade at a? discount, at? par, or at a? premium?

Note?: Assume annual compounding.

Reference no: EM133111753

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