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Can anyone solve this ? Today's yield curve for risk-free, zero-coupon bonds looks as follows: 1-year rate is 5.6%, 2-year rate is 6.6%, 3-year rate
Can anyone solve this ?
Today's yield curve for risk-free, zero-coupon bonds looks as follows: 1-year rate is 5.6%, 2-year rate is 6.6%, 3-year rate is 7.8%, and 4-year rate is 8.7%. If you buy a three- year zero coupon today, what do you expect your rate of return will be over the next year if you expect that one year from today the yield curve will look the same as it does today? Express your answer in decimal format, rounded accurately to 4 decimal places (e.g., 1.23456% should be entered as 0.1235 and nothing else)Step by Step Solution
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