ou are given the following information about bond A, B, and C: Bond Type Face...
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Accounting
ou are given the following information about bond A, B, and C:
Bond
Type
Face Value
Coupon
Maturity
Price
A
Zero Coupon Bond
$1,000
-
1 year
$925.93
B
Level Coupon Bond
$1,000
5%
2 years
$953.21
C
Level Coupon Bond
$1,000
10%
3 years
$1,071.88
1. Assuming that all the bonds make only annual payments, what spot rates
,
, are
imbedded in these prices?
2. What is the price of a 3
-year level coupon bond with a face value of $1,000 and a 6%
annual coupon rate?
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