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A 2-year bond has a face value of $1000 and pays annual coupons of 6.00%....

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Finance

A 2-year bond has a face value of $1000 and pays annual coupons of 6.00%.

You find that the 1-year spot rate is 3.73%, and the 2-year spot rate is 4.85%.

Assuming that the expectations hypothesis is correct, what will the bond's price be next year, immediately after the first coupon has been paid.

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