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Andy decides to invest $200 in a four year bond which promises to pay interest in a time-varying way, but deterministic. More precisely, it is given to be ik = (1 - 1/ for year k with k = 1, 2, 3 and 4. a) Calculate the return of Andy's investment. (Please round your answer to 4th decimal place)
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Fundamentals of Investments, Valuation and Management
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin