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Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity A 1 6.20 % B 2 7.70 % C 3

Consider the following $1,000 par value zero-coupon bonds:

Bond Years to Maturity Yield to Maturity
A 1 6.20 %
B 2 7.70 %
C 3 8.20 %
D 4 8.70 %
E 5 10.75 %

The expected 1-year interest rate 2 years from now should be _________.

19.28%

11.76%

19.34%

9.21%

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