Assume the current Treasury yield curve shows that the spot rates for six months, one year, and one and a half years are
1%,
1.1%,
and
1.3%,
all quoted as semiannually compounded APRs. What is the price of a
$1,000
par,
4.25%
coupon bond maturing in one and a half years (the next coupon is exactly six months from now)?
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