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Question
A four-year, zero-coupon Treasury bond sells at a price of $762.8952. A three-year, zero-coupon Treasury bond sells at a price of $827.8491. Assuming the pure expectations theory is correct, what does the market believe the price of one-year, zero-coupon bonds will be in three years?
a. $921.66
b. $934.58
c. $938.97
d. $945.26
e. $950.47
Answer
This answer is hidden. It contains 327 characters.
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