Yield to maturity and market price

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a. Based on the above spot rates, what is the 2-year forward rate one year from now?

b. Using the spot rates given above, what is the arbitrage-free value of a 2-year 8.5% coupon bond?

c. How can we get 3-year spot rate based on the first table having yield to maturity and market price? Please write the formula and do the calculations.

Reference no: EM132517636

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