Question: Fill in the missing items in the following table, using the Law of One Price. Assume all these bonds have the same risk and any

Fill in the missing items in the following table, using the Law of One Price. Assume all these bonds have the same risk and any coupon payments are paid annually. Bond # 1 2 3 4 1-year strip bond 2-year strip bond 2-year 6% coupon bond 2-year 7% coupon bond Time 0 cash flow (i.e., Purchase Price for the bond) (950) (898.45) (1009.23) (1090.59) Time 1 cash flow +1000 0 +60 +70 Time 2 cash flow 0 +1000 +1060 +1070

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