a. Assuming that the expectations hypothesis is valid, compute the price of the four-year bond shown below at the end of the first year, the second year: (1) the third year; (iv) the fourth year. (Do not round intermediate calculations. Round your answers to 2 decimal places.) of Year 2 Price of Bond Expected Price $ 910.90 $ 907.97 $ 828.12 $ 768.497 4 b. What is the rate of return of the bond in years 1. 2. 3, and 4? Conclude that the expected return equals the forward rate for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Beginning of Year Expected Rate of Return Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity YTH() 7.1 According to the expectations hypothesis, what is the market's expectation of the yield curve one year from now? Specifically, what are the expected values of next year's yields on bonds with maturities of (a) one year? (b) two years? (c) three years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Bond Years to Maturity YTM (%)