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Suppose That All Investors Expect That Interest Rates for the 4

Question 45

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Suppose that all investors expect that interest rates for the 4 years will be as follows: Suppose that all investors expect that interest rates for the 4 years will be as follows: If you have just purchased a 4-year zero-coupon bond, what would be the expected rate of return on your investment in the first year if the implied forward rates stay the same? (Par value of the bond = $1,000) A) 5% B) 7% C) 9% D) 10% If you have just purchased a 4-year zero-coupon bond, what would be the expected rate of return on your investment in the first year if the implied forward rates stay the same? (Par value of the bond = $1,000)


A) 5%
B) 7%
C) 9%
D) 10%

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