Using the expectations theory the implied forward rate for a two year zero-coupon bond 3 years from today is j₂ = 3.52%. The yield today on a three year zero-coupon bond is j₂ =3 %.

What is the yield today on a 5-year zero coupon bond?

• A.

  The yield is j₂ = 8.62%.

• B.

  The yield is j₂ = 3.21%.

• C.

  The yield is j₂ = 4.43%.

• D.

  The yield is j₂ = 3.25%.