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Please answer Consider the following $1,000 par value zero-coupon bonds: Bond A Years until Maturity 1 2 3 4 ADA Yield to Maturity 10.000 11.00

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Consider the following $1,000 par value zero-coupon bonds: Bond A Years until Maturity 1 2 3 4 ADA Yield to Maturity 10.000 11.00 11.50 12.00 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.) YTM Maturity (years) 1 2 % % % 3

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