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Consider the following $ 1 , 0 0 0 par value zero - coupon bonds: Bond Years until Maturity Yield to Maturity A 1 1
Consider the following $ par value zerocoupon bonds:
Bond Years until Maturity Yield to Maturity
A
B
C
D
Required:
a According to the expectations hypothesis, what is the markets expectation of the oneyear interest rate three years from now? Do not round intermediate calculations. Round your answer to decimal places.
b What are the expected values of next years yields on bonds with maturities of a year; b years; c years? Do not round intermediate calculations. Round your answer to decimal places.
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