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  3. suppose you observe the following zero- coupon bon

Suppose you observe the following zero- coupon bond prices per $1 of maturity payment: 0.95138...

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Accounting

Suppose you observe the following zero- coupon bond prices per $1 of maturity payment: 0.95138 (1-year), 0.89982 (2-year), 0.83488 (3-year). Compute r 0(1,3), the implied forward rate for a loan made at the end of year 1 and maturing at the end of year 3.

a. 8.11%

b. 6.75%

c. 7.78%

d.5.73%

e.6.98%

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