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Yield rates to maturity for zero-coupon bonds are currently quoted at 6.55% for one-year maturity, 7.50% for two-year maturity, and 8.50% for three-year maturity. Let
Yield rates to maturity for zero-coupon bonds are currently quoted at 6.55% for one-year maturity, 7.50% for two-year maturity, and 8.50% for three-year maturity. Let i be the one-year forward rate one year deferred rate implied by current yields of these bonds. Calculate i.
A. 8.5% B. 9.5% C. 10.5% D. 11.5% E. 12.5%
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