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Consider the following information about zero coupon bonds. Each spot rate is expressed as an annual...

Consider the following information about zero coupon bonds. Each spot rate is expressed as an annual percentage rate (APR), compounded semi-annually.

Bond Maturity Price Face Value Spot Rate(APR)
a 1 year ? $1000

9.66%

b 2 year $856 $1000 ?

a) Calculate the price of bond A and the annual spot rate (APR) of bond B

b) Calculate the price of a two-year level coupon bond (bond C) with an annual 5% coupon rate (annual payments)

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