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

Question 36

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000.  Maturity  Price  (Years)  1$943.402881.683808.884742.05\begin{array} { c c } \text { Maturity } & \text { Price } \\\text { (Years) } & \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.05\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.

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