Question
The WSJ reports that the YTM of 1-, 2-, and 3-year default-free zero-coupon bonds are 7%, 7.5%, and 8.2%, respectively. Based on the expectations theory,
The WSJ reports that the YTM of 1-, 2-, and 3-year default-free zero-coupon bonds are 7%, 7.5%, and 8.2%, respectively. Based on the expectations theory, what should be the implied 1-year forward rate, one year from today?
| A. | 7.79% | |
| B. | 8.12% | |
| C. | 7.91% | |
| D. | 8.00% |
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Introduction To Institutions Management And Investments
Authors: Herbert Mayo
10th International Edition
1111820643, 9781111820640
