1.

a)Given the YTMs of zero-coupon bonds of four maturities below and assuming the expectations hypothesis holds, calculate the yield on a two-year bond expected to obtain at the end of year 1. Please enter your answer in percent rounded to the nearest basis point.

Maturity	YTM
1	5%
2	6%
3	6.5%
4	7%

b)Given the prices of zero-coupon bonds of four maturities below, calculate the yield to maturity of the three year bond. Please enter your answer in percent, rounded to the nearest basis point.

Maturity	Price
1	$943.40
2	$898.47
3	$847.62
4	$792.16

c)Given the YTMs of zero-coupon bonds of four maturities below and assuming the expectations hypothesis holds, calculate the yield on a three-year bond expected to obtain at the end of year 1. Please enter your answer in percent rounded to the nearest basis point.

Maturity	YTM
1	5%
2	6%
3	6.5%
4	7%

d)Given the YTMs of zero-coupon bonds of four maturities below and assuming the expectations hypothesis holds, calculate the short rate (the future one-year rate) expected to obtain at the end of year 3. Please enter your answer in percent rounded to the nearest basis point.

Maturity	YTM
1	5%
2	6%
3	6.5%
4	7%