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Consider the following $1,000 par value zero-coupon bonds: Bond B C D Years to Maturity 1 2 3 Yield to Maturity 5.30% 6.80% 7.30% 7.80%

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Consider the following $1,000 par value zero-coupon bonds: Bond B C D Years to Maturity 1 2 3 Yield to Maturity 5.30% 6.80% 7.30% 7.80% 10.75% 4 5 The expected 1-year interest rate 2 years from now should be Multiple Choice 10.86% O 23.38% O 8.31% 17.32%

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