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Currently, the term structure is as follows: One-year bonds yield 9.25%, two-year zero-coupon bonds yield 10.25%, three-year and longer maturity zero-coupon bonds all yield 11

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Currently, the term structure is as follows: One-year bonds yield 9.25%, two-year zero-coupon bonds yield 10.25%, three-year and longer maturity zero-coupon bonds all yield 11 25% You are choosing between one, two, and three-year maturity bonds all paying annual coupons of 10.25%. You strongly believe that at year-end the yield curve will be flat at 11.25% a. Calculate the one year total rate of return for the three bonds. (Do not round intermediate calculations, Round your answers to 2 decimal places.) sok One Year Two Years Three Years int One year total rate of return rences bs. Which bond you would buy! One year bond Two year bond Three-year bond

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