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Assume that the Pure Expectations Theory of the Term Structure is correct. If you invest $ 1 , 0 0 0 at the beginning of

Assume that the Pure Expectations Theory of the Term Structure is correct. If you invest $1,000 at the beginning of Year 3, and leave it invested for Years 3,4, and 5, then how much will you have at the end of Year 5
Year K* Average K* Inflation Average IP Kn Kf
11%1.00%3.0%3.0%4.00%4.0%
21%1.00%3.0%3.0%4.00%4.0%
31%1.00%3.6%3.2%4.20%4.6%
42%1.25%4.4%3.5%4.75%6.4%
52%1.40%6.0%4.0%5.40%8.0%

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