A Four-Year,zero-Coupon Treasury Bond Sells at a Price of $762

question 11

Multiple Choice

A four-year,zero-coupon Treasury bond sells at a price of $762.8952.A three-year,zero-coupon Treasury bond sells at a price of $827.8491.Assuming the pure expectations theory is correct,what does the market believe the price of one-year,zero-coupon bonds will be in three years?

• A) $921.66
• B) $934.58
• C) $938.97
• D) $945.26
• E) $950.47

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