Question
Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A 1 4.4 % B 2 5.4 C 3 5.9
Consider the following $1,000 par value zero-coupon bonds:
| Bond | Years until Maturity | Yield to Maturity | |
| A | 1 | 4.4 | % |
| B | 2 | 5.4 | |
| C | 3 | 5.9 | |
| D | 4 | 6.4 | |
|
| |||
According to the expectations hypothesis, what is the markets expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Interest rate %
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The Concepts And Practice Of Mathematical Finance
Authors: Mark S. Joshi
1st Edition
0521823552, 9780521823555
