The Following Is a List of Prices for Zero-Coupon Bonds $\begin{array}{cc}\text { Maturity }\\\text { (Years) } & \text { Price } \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.09\end{array}$

question 15

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000. $\begin{array}{cc}\text { Maturity }\\\text { (Years) } & \text { Price } \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.09\end{array}$ According to the expectations theory, what is the expected forward rate in the third year?

• A) 7.00%
• B) 7.33%
• C) 9.00%
• D) 11.19%
• E) None of the options are correct.

---

Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having a partial ownership in the company.

Shareholders

Individuals or entities that own shares in a corporation, granting them certain rights and potential financial benefits from the company's performance.

Dissolved

The process of officially ending the existence of a corporate entity or partnership through legal means.

U.S. Constitution

The supreme law of the United States of America, establishing the framework of the national government and the rights of citizens.