You Find That the Yield on a 6-Year Bond Is

question 101

Multiple Choice

You find that the yield on a 6-year bond is 12% while that of a 4-year bond is 9%.What should be the yield on a 2-year bond beginning four years from now as predicted by the expectations' theory?

• A) 3.00%
• B) 18.25%
• C) 39.83%
• D) none of the above

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