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The Price of a 3-Year Zero Coupon Government Bond Is

question 1

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The price of a 3-year zero coupon government bond is 85.16.The price of a similar 4-year bond is 78.81.What is the 1-year implied forward rate from year 3 to year 4?

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Definitions:

Preexisting Expectations

Assumptions or beliefs that one has before encountering new information or experiences.

Internal Attributions

The tendency to explain one's behavior or the behavior of others based on internal, personal characteristics rather than external situations.

Behavior

The actions, reactions, or conduct of an individual, often studied in psychology to understand individuals and groups.

Personal Characteristics

Attributes or traits that define an individual's unique personal identity, including behavioral patterns, emotional responses, and cognitive processes.

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