Question: Consider 2 securities with face value equal to 100. One year pure discount bond selling at $96. One two year 8% discount bond selling at

Consider 2 securities with face value equal to 100.

One year pure discount bond selling at $96.

One two year 8% discount bond selling at $96.

What is the two year zero coupon rate R(0,2)? (Note: this is not finding the YTM, but the two year zero coupon bond price)

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