Question: Currently, the term structure is as follows: One - year bonds yield 7 % , two - year zero - coupon bonds yield 8 %

Currently, the term structure is as follows: One-year bonds yield 7%, two-year zero-coupon bonds yield 8%, three-year and longer maturity zero-coupon bonds all yield 9%. You are choosing between one, two, and three-year maturity bonds all paying annual coupons of 8%. You strongly believe that at year-end the yield curve will be flat at 9%.
Required:
a. Calculate the one year total rate of return for the three bonds. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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