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Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity A 1 5.70 % B 2 7.20 % C 3
Consider the following $1,000 par value zero-coupon bonds:
Bond | Years to Maturity | Yield to Maturity | ||
A | 1 | 5.70 | % | |
B | 2 | 7.20 | % | |
C | 3 | 7.70 | % | |
D | 4 | 8.20 | % | |
E | 5 | 10.50 | % | |
The expected 1-year interest rate 2 years from now should be
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