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Assume that the Pure Expectations Theory of the Term Structure is correct and that the expected one year rates for each of the next three

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Assume that the Pure Expectations Theory of the Term Structure is correct and that the expected one year rates for each of the next three years are Year 1=5%, Year 2=6%, and Year 3=7%. Assume now that a corporate bond has a par value of $1,000,3 years until it matures, and pays $50 in interest on an annual basis each year (you should now be able to calculate the price of this bond - see tabli below). What is the yield to maturity for this bond? 5.96% 5.86% 6.06% 6.26% 6.16%

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