Question
Consider the following $1,000 par value zero-coupon bonds:
BondYears to MaturityYield to
MaturityA1 5.20%B2 6.70%C3 7.20%D4 7.70%E5 10.25%
The expected 1-year interest rate 2 years from now should be _________.
10.76%
21.07%
8.21%
17.10%
Finance