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Assuming annual compounding, the prices of a one-year 4% coupon bond and a two-year 5% coupon bond are $101 and $99, respectively. The forward rate between one and two years is:
Market System
A financial framework where the choices about investment, production, and allocation are directed by the price indicators generated through the dynamics of supply and demand.
Government Ownership
This refers to enterprises or assets owned by the government or public authorities, rather than by private individuals or companies.
Private Property
Owned assets or possessions that are legally recognized and protected, excluding those owned by government entities.
Freedom of Enterprise
The freedom for individuals to start and operate private businesses in search of profits with minimal government intervention.
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