Question: QUESTION 16 Assume expectations hypothesis is true. Today, a 1-year bond has an annualized rate of retum of 10% per year. A 2-year bond has

QUESTION 16 Assume expectations hypothesis is true. Today, a 1-year bond has an annualized rate of retum of 10% per year. A 2-year bond has an annualized rate of return of 12% per year. A 3-year bond has an annualized rate of return of 15% per year. What is the forward rates for a 1-year bond in the second year? 21.29 14.0 % 25.9 % O:20.4% QUESTION 17 What is the present value of a promise to receive $100 forever, beginning next year (t-1), if the interest rate is 6% per year? O $1,600 $1,588 $1,667 O $1,500

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