Question: Assuming that the expectntions hypothesis is valid, compute the expected price of the four-year zero coupon bond shown below at he end of the first

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

Assuming that the expectntions hypothesis is valid, compute the expected price of the four-year zero coupon bond shown below at he end of the first year, (ith the second year; fia the third year. (y ) the fourth yeat (Do not round intermediate calculations. Round nour answers to 2 decimal places.) b. What is the rate of teturn of the bond in years 1, 2,3, and 4 ? Conciude that the expected return equals the forward rate for each yeat. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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