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The yields of four zero-coupon bonds of varying maturities are as follows: Maturity YTM 1 6.1% 2 6.2% 3 6.3% 4 6.4% If you expect
The yields of four zero-coupon bonds of varying maturities are as follows:
Maturity | YTM |
1 | 6.1% |
2 | 6.2% |
3 | 6.3% |
4 | 6.4% |
If you expect the implied term structure to be the same next year as it is this year, what is the expected return on the 1-year zero-coupon bond over the coming year? Please express your answer in percent, rounded to the nearest basis point.
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