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Suppose that all investors expect that interest rates for the 4 years will be as follows: Year Forward Interest Rate 0 (today)3 % 1 4
Suppose that all investors expect that interest rates for the 4 years will be as follows:
| Year | Forward Interest Rate | |
| 0 | (today)3 | % |
| 1 | 4 | % |
| 2 | 5 | % |
| 3 | 6 | % |
What is the yield to maturity of a 3-year zero-coupon bond?
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Financial Markets And Institutions
Authors: Jeff Madura
6th Edition
0324162618, 978-0324162615
