If Forward Rates Are Known with Certainty and All Bonds

question 43

Multiple Choice

If forward rates are known with certainty and all bonds are fairly priced

• A) all bonds would have the same yield to maturity.
• B) all short-maturity bonds would have lower prices than all long-maturity bonds.
• C) all bonds would have the same price.
• D) all bonds would provide equal 1-year rates of return.
• E) none of these.