18) Suppose that all investors expect that interest rates for the 4 years will be as follows:

Year Forward Interest Rate 0 (today)6 % 1 7 % 2 9 % 3 10 %

What is the price of a 3-year zero-coupon bond with a par value of $1,000? A) $765.55 B) $863.83 C) $772.18 D) $816.58 E) None of the options are correct.