YIELD CURVE FOR ZERO-COUPON BONDS RATED AA Maturity 1 year 2 year 3 year 4 year 5 year 6 year Assume that there are no liquidity premiums. You just bought a 15-year maturity Xerox corporate bond rated AA with a zero percent coupon. You expect to sell the bond in eight years. Find the expected interest rate at the time of sale. YTM 8.00% 8.11% 8.20% 8.50% 8.75% 8.85% Maturity 7 year 8 year 9 year 10 year 11 year 12 year YTM 9.15% 9.25% 9.35% 9.47% 9.52% 9.77% Maturity 13 year 14 year 15 year 16 year 17 year 18 year YTM 10.45% 10.65% 10.75% 10.95% 11.00% 11.25%

YELD CURVE FOR ZERO COUPON BONDS RATED AA Assume that there ace no lquidity premiums You just bought a 15 -year maturity Xerax corporate bond rated AA with a zero percent coupon. You expect to sell the bond in eight years. Find the expected interest rate at the tame of sale