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You Plan to Buy a 2 Year Zero Coupon Bond

Question 39

Multiple Choice

You plan to buy a 2 year zero coupon bond one year from today.If the risk free rate is 5.6% and a three year zero-coupon bond currently sells for $843.25,what should be the forward price?


A) $890.47
B) $943.25
C) $925.89
D) $1045.72

Correct Answer:

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