An investor considers the purchase of a two-year bond with a 5% coupon rate, with interest paid
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An investor considers the purchase of a two-year bond with a 5% coupon rate, with interest paid annually. Assuming the sequence of spot rates shown below, the price of the bond is closest to:
A. 101.93.
B. 102.85.
C. 105.81.
Transcribed Image Text:
Time-to-Maturity 1 year 2 years Spot Rates 3% 4%
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