The Following Is a List of Prices for Zero-Coupon Bonds

question 2

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par value of $1,000. What is, according to the expectations theory, the expected forward rate in the third year

• A)7.23%
• B)9.37%
• C)9.00%
• D)10.9%

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Definitions:

Miscarriage

The spontaneous loss of a pregnancy before the fetus can survive outside the womb, usually before 20 weeks of gestation.

First Three Months

A reference typically used to describe the initial trimester of pregnancy, which is crucial for the development of the embryo into a fetus.

Salty Tastes

One of the five basic taste sensations, experienced when sodium ions are present in the food or drink consumed.

Infants

Young humans in the early stages of life, typically from birth to one year, characterized by rapid growth and development.