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Using the following binomial model of one-year interest rate, price a 2-year, 1% annual-coupon bond...

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Accounting

Using the following binomial model of one-year interest rate, price a 2-year, 1% annual-coupon bond with a par value of $818. Assume annual compounding.

All rates are expressed on a bond equivalent basis. Round your answer to 2 decimal places.

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Time 0 Time 1 11,H = 8% io = 2% 11,1 = 4%

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