Question: Homework 9 0 Saved Help Save & Exit Submit Prices of zero-coupon bonds reveal the following pattern offorward rates: Year Forward Rate 25 l 4%

Homework 9 0 Saved Help Save & Exit Submit Prices of zero-coupon bonds reveal the following pattern offorward rates: Year Forward Rate 25 l 4% . 2 5 paints 3 6 eBOOk In addition to the zero-coupon bond, investors also may purchase a 3-year bond making annual payments of $40 with par value Print $1000 Rgfe'ences a. What is the price of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the yield to maturity of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Under the expectations hypothesis, what is the expected realized compound yield of the coupon bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If you forecast that the yield curve in 1 year will be flat at 5.5%, what is your forecast for the expected rate of return on the coupon bond for the 1year holding period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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