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Treasury spot interest rates are as follows: Part 1 Q. Attempt 1/10 for 10 pts. What is the fair
price of a Treasury note with 2 years to maturity, a $1,000 face value, and a coupon rate of 5.2%,
paid annually (in $ )? Correct dP=1+r1C+(1+r2)2C+F=1+0.02152+(1+0.028)21,052=1,046.4
Part 2 A Attempt 4/10 for 7 pts. Suppose this Treasury note is currently priced in the market fair
and square (no mispricing), what is the yield to maturity?

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