Question: For Question 3,is it asking for the expected spot rate for Year 7 or Forward Rate at Year 7? Thank you. The Question is: If

For Question 3,is it asking for the expected spot rate for Year 7 or Forward Rate at Year 7?

Thank you.

The Question is:

If a pure discount three-year bond sells for $782 and a pure discount four-year bond

sells for $733, what is the expected 12-month interest rate in three years time? Both

have a face value of $1000.

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