Look again at Table 3.5. Suppose the spot interest rates change to the following downward-sloping term structure:

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Look again at Table 3.5. Suppose the spot interest rates change to the following downward-sloping term structure: r1 = 4.6%, r2 = 4.4%, r3 = 4.2% and r4 = 4.0%. Recalculate discount factors, bond prices, and yields to maturity for each of the bonds listed in the table.

TABLE 3.5

Look again at Table 3.5. Suppose the spot interest rates


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Principles of Corporate Finance

ISBN: 978-1259144387

12th edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen

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