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The yield to maturity on 1-year zero-coupon bonds is currently 9%; the YTM on 2-year zeros is 10%; the YTM on 3-year zeros is 10.5%.

The yield to maturity on 1-year zero-coupon bonds is currently 9%; the YTM on 2-year zeros is 10%; the YTM on 3-year zeros is 10.5%. The Treasury plans to issue a 3-year maturity coupon bond, paying coupons once per year with a coupon rate of 11%. The face value of the bond is $1,000. If the expectations theory of the yield curve is correct, what is the market expectation of the price that the bond will sell for next year?

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