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The yield to maturity for a benchmark one-year annual-pay bond is 2%, for a benchmark...

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Accounting

The yield to maturity for a benchmark one-year annual-pay bond is 2%, for a benchmark two-year annual-pay bond is 3%, and for a benchmark three-year annual-pay bond is 4%. A three year, 5% coupon, annual-pay bond with the same risk and liquidity as the benchmarks is selling for $102.7751 today (time zero) to yield 4%. Is this value correct for the bond given the current term structure?

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