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What is the expectations theory? What is the formula? Why does the solution show them dividing the 3rd year by the 2nd year? MC Qu.

What is the expectations theory? What is the formula? Why does the solution show them dividing the 3rd year by the 2nd year?

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MC Qu. 20 The following is a list of prices... The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000 Maturity CYears) Price $943.40 $881.68 $808.88 $742.09 What is, according to the expectations theory, the expected forward rate in the third year? 0 7.00% o 733% 9.00% 11.19% None of the options 881.68/808.88-1-996

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