Question: Consider 2 securities with face value equal to 100. One year pure discount bond selling at $94.84. One two year 7.23% discount bond selling at

Consider 2 securities with face value equal to 100.

One year pure discount bond selling at $94.84.

One two year 7.23% discount bond selling at $97.85.

What is the two year zero coupon rate R(0,2)?

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