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Consider the following $1,000 par value zero-coupon bonds: Years until Maturity MUA WN Yield to Maturity 8.50% 9.50 10.00 10.50 a. According to the expectations
Consider the following $1,000 par value zero-coupon bonds: Years until Maturity MUA WN Yield to Maturity 8.50% 9.50 10.00 10.50 a. According to the expectations hypothesis, what is the market's 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 b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Maturity (years) YTM 2
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