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Consider the following five $1,000 par value zero-coupon bonds: (A) Maturity in 1 year and 5.5% Yield to Maturity; (B) Maturity in 2 years and
Consider the following five $1,000 par value zero-coupon bonds: (A) Maturity in 1 year and 5.5% Yield to Maturity; (B) Maturity in 2 years and 5.9% Yield to Maturity; (C) Maturity in 3 years and 8% Yield to Maturity; (D) Maturity in 4 years and 9% Yield to Maturity; and (E) Maturity in 5 years and 10% Yield to Maturity; Ignoring any liquidity premiums, the expected 1-year interest rate 1 year from now should be _________.
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