Question: Today, you bought a 2 - year zero - coupon security that pays you $ 6 0 at the end of year 2 . The

Today, you bought a 2-year zero-coupon security that pays you $60 at the end of
year 2. The zero-coupon bond is stripped from a coupon-bearing debt security. The
applicable one-year spot rate for this debt security is 5.5%. Suppose in the second
year, the real rate is 0.7%, the inflation premium is 6% and the maturity risk
premium is 0.3%. What is the price of the zero-coupon security today?
A.49.19
B.50.01
C.52.11
D.53.15
E.58.01

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