Question: Problem 1 Consider a 1-year zero-coupon bond with $1,000 face value. Assume today's 6-month forward rate is 6% and in six months the new 6-month

Problem 1 Consider a 1-year zero-coupon bond with $1,000 face value. Assume today's 6-month forward rate is 6% and in six months the new 6-month forward rate can be either 5% or 7%. Assume also that t...

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