A 2-year zero-coupon bond with $100 principal is trading at $95.00. Price of a 2-year coupon bond with annual coupon of $10 and principal of $100 is $104.00. (a) What is the 2-year spot rate from t = 0 to t = 2? (b) What is the spot rate per year from t = 0 to t = 1?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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A 2-year zero-coupon bond with $100 principal is trading at $95.00. Price of a 2-year coupon bond with annual coupon of $10 and principal of $100 is $104.00. (a) What is the 2-year spot rate from t = 0 to t = 2? (b) What is the spot rate per year from t = 0 to t = 1?
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