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The yield curve for a zero-coupon bonds is as follows: Maturity years: Yield to Maturity: 1 2% 2 2.75% 3 3% 1. What are the

The yield curve for a zero-coupon bonds is as follows: Maturity years: Yield to Maturity: 1 2% 2 2.75% 3 3%

1. What are the implied one year forward rates for each bond?

2. What will be the yield to maturity on one year zero-coupon bonds next year

3. What is the yield to maturity on a two-year zero coupon bonds one year from now.

4. Would your project yield to maturity in part 3 be higher or lower? Explain.

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