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The term structure for zero-coupon bonds is currently: Maturity (Years)IMTM (96) 2 3 5.2% 6.2 7.2 Next year at this time, you expect it to

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The term structure for zero-coupon bonds is currently: Maturity (Years)IMTM (96) 2 3 5.2% 6.2 7.2 Next year at this time, you expect it to be: Maturity (Years) YTM (%) 6.2% 7.2 8.2 2 3 a. What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Rate of return b- Under the expectations theory, what yields to maturity does the market expect to observe on 1-and 2- 1. year zeros at the end of the year? (Round your answers to 2 decimal places. Omit the"%" sign in your response.) 2 2 Is the market's expectation of the return on the 3-year bond greater or less than yours? Greater Less

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