Question
EX3. Today is January 2, 2022, and investors expect the annual nominal risk-free interest rates in 2022 through 2024 to be: Year One-Year Rate (r
Today is January 2, 2022, and investors expect the annual nominal risk-free interest rates in 2022 through 2024 to be:
| Year | One-Year Rate (rRF) | |
| 2022 | 2.0 | % |
| 2023 | 1.2 | |
| 2024 | 2.5 | |
Assume the bonds have no risks.
-
What is the yield to maturity for Treasury bonds that mature at the end of 2023 (a two-year bond)? Round your answer to one decimal place.
%
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What is the yield to maturity for Treasury bonds that mature at the end of 2024 (a three-year bond)? Round your answer to one decimal place.
%
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Fundamentals of Investments
Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey
3rd edition
132926172, 978-0132926171
