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Currently, the term structure is as follows: One-year bonds yield 11.75%, two-year bonds yield 12.75%, three-year
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Currently, the term structure is as follows: One-year bonds yield 11.75%, two-year bonds yield 12.75%, three-year bonds and greater maturity bonds all yield 13.75%. You are choosing between one-, two-, and three-year maturity bonds all paying annual coupons of 12.75%, once a year. You strongly beli...
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