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Suppose the current yield on a one-year zero-coupon bond is 4 %, while the yield on a five-year zero-coupon bond is 6 %. Neither bond

Suppose the current yield on a one-year zero-coupon bond is 4 %, while the yield on a five-year zero-coupon bond is 6 %. Neither bond has any risk of default. Suppose you plan to invest for one year. You will earn more over the year by investing in thefive-year bond as long as its yield does not rise above whatlevel?  (Assume $ 1 face value bond.)  Hint: It is best not to round intermediate calculations - make sure to carry at least four decimal places in intermediate calculations. Note:  Assume annual compounding. The yield should not rise above 

nothing%.

(Round to two decimal places.)


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