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Currently, the term structure is as follows: One-year bonds yield 10.50%, two-year zero-coupon bonds yield 11.50%, three-year and onger maturity zero-coupon bonds all yield 12.50%.

image text in transcribed Currently, the term structure is as follows: One-year bonds yield 10.50%, two-year zero-coupon bonds yield 11.50%, three-year and onger maturity zero-coupon bonds all yield 12.50%. You are choosing between one, two, and three-year maturity bonds all paying innual coupons of 11.50%. You strongly believe that at year-end the yield curve will be flat at 12.50%. ?equired: 1. Calculate the one year total rate of return for the three bonds. (Do not round intermediate calculations. Round your answers to 2 lecimal places.)

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