What Would the Yield to Maturity Be on a Rate

question 61

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1 Year Forward Rate } \\1 & 4.5\% \\2 & 5.2\% \\3 & 5.9\% \\4 & 6.3\% \\5 & 6.8 \% \\6 & 7.0\%\end{array}$
. What would the yield to maturity be on a four-year zero-coupon bond purchased today?

• A) 7.80%
• B) 6.30%
• C) 5.47%
• D) 4.25%
• E) None of the options are correct.

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Definitions:

Decision-making model

A conceptual framework or process used to make systematic and informed choices among available options.

Vroom, Yetton, and Jago

Refers to a model of decision-making that outlines how leaders can choose among different leadership styles based on certain situational variables.

Authority decisions

decisions made by individuals in positions of power within an organization, often without extensive consultation.

Escalating commitment

A decision-making process where individuals or organizations continue to invest in a failing course of action due to the significant resources already spent.