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QUESTION 12 $1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity 6% 75% 7.99% C 3 4 E 5

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QUESTION 12 $1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity 6% 75% 7.99% C 3 4 E 5 10.7% 8.49% The expected 2-year interest rate 3 years from now should be The expected 2-year interest rate 3 years from now should be

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