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What price should the client pay for the bond

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Reference no: EM133115529

Your client is considering purchasing a 4-year bond with an 8% coupon, with interest paid annually. Assuming the spot rates below, what price should the client pay for the bond (per 100 of par value)?

Time-to-Maturity

Spot Rates

1 year

2.0%

2 years

2.5%

3 years

3.0%

4 years

4.0%

Reference no: EM133115529

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