The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000. $$\begin{array} { | l | l | }
\hline \text { Maturity (Years) } & \underline { \text { Price } } \
\hline 1 & \$ 943.40 \
\hline 2 & \$ 881.68 \
\hline 3 & \$ 808.88 \
\hline 4 & \$ 742.09 \
\hline
\end{array}$$
-What is,according to the expectations theory,the expected forward rate in the third year?
A)7.00%
B)7.33%
C)9.00%
D)11.19%
E)none of the above

Question

The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000. $$\begin{array} { | l | l | } 
\hline \text { Maturity (Years) } & \underline { \text { Price } } \
\hline 1 & \$ 943.40 \
\hline 2 & \$ 881.68 \
\hline 3 & \$ 808.88 \
\hline 4 & \$ 742.09 \
\hline
\end{array}$$
-What is,according to the expectations theory,the expected forward rate in the third year?
A)7.00%
B)7.33%
C)9.00%
D)11.19%
E)none of the above

Quizplus · Accepted Answer

The Answer of The following is a list of prices for zero coupon bonds with different maturities and par value of $1,000. $$\begin{array} { | l | l | } 
\hline \text { Maturity (Years) } & \underline { \text { Price } } \
\hline 1 & \$ 943.40 \
\hline 2 & \$ 881.68 \
\hline 3 & \$ 808.88 \
\hline 4 & \$ 742.09 \
\hline
\end{array}$$
-What is,according to the expectations theory,the expected forward rate in the third year?
A)7.00%
B)7.33%
C)9.00%
D)11.19%
E)none of the above

The Following Is a List of Prices for Zero Coupon