Suppose That All Investors Expect That Interest Rates for the 4

Multiple Choice

Suppose that all investors expect that interest rates for the 4 years will be as follows: $$\begin{array} { l | l | } \hline \text { Year } & \text { Forward Interest Rate } \\\hline 0 & \text { (today) } 5 \% \\\hline 1 & 7 \% \\\hline 2 & 9 \% \\\hline 3 & 10 \% \\\hline\end{array}$$
-What is the yield to maturity of a 3-year zero coupon bond?

A) 7.00%
B) 9.00%
C) 6.99%
D) 7.49%
E) none of the above