An FI manager purchases a zero-coupon bond that has two years to maturity. The manager paid $76.95 per $100 for the bond. The current yield on a one-year bond of equal risk is 12 percent, and the one-year rate in one year is expected to be either 16.65 percent or 15.35 percent. Either rate is equally probable. What is the market-determined, implied one-year rate one year before maturity?

Question 9 options:

27.99 percent.

13.54 percent.

29.95 percent.

16.00 percent.