Consider a Swiss Confederation zero-coupon bond with a par value of CHF100, a remaining time to maturity

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Consider a Swiss Confederation zero-coupon bond with a par value of CHF100, a remaining time to maturity of 12 years and a price of CHF89. In three years’ time, the bond is expected to have a price of CHF95.25. If purchased today, the bond’s expected annualized return is closest to:

A. 0.58 percent.

B. 1.64 percent.

C. 2.29 percent.

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