A 4-Year,zero Coupon Treasury Bond Sells at a Price of $792.0937.A

question 9

Multiple Choice

A 4-year,zero coupon Treasury bond sells at a price of $792.0937.A 3-year,zero coupon Treasury bond sells at a price of $851.6137.Assuming the expectations theory is correct,what does the market believe the price of 1-year,zero coupon bonds will be in 3 years? Do not round your intermediate calculations.

• A) $1,004.52
• B) $781.29
• C) $967.31
• D) $1,041.72
• E) $930.11

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Definitions:

Fireproof

A property or material that is resistant to or capable of withstanding damage from fire.

Insured

The individual or entity covered under an insurance policy and protected against specified risks or losses.

Just-In-Time

A management strategy that aligns raw-material orders from suppliers directly with production schedules to reduce inventory costs.

Insurable Interest

A stake or a legal right in the preservation of an item, person, or property that allows an individual or entity to obtain insurance coverage against loss or damage.