Question: Assuming that the expectations hypothesis is valid, compute the expected price path of the 4-year bond using the data given below as time passes. What

 Assuming that the expectations hypothesis is valid, compute the expected price

Assuming that the expectations hypothesis is valid, compute the expected price path of the 4-year bond using the data given below as time passes. What is the rate of return of the bond in each year? (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "S" & "%". signs in your response.) Maturity (Years) 2 3 4 Price of Bond $960.90 $904.97 $846.12 $780.76 Beginning of Year Expected Rate of Return Expected Price $ 780.76 0 2 847.20 6.96 % 4 906.04 831 %

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