Required:

a$.$ Assuming that the expectations hypothesis is valid, compute the expected price of the four$-$year zero coupon bond shown below at

the end of $($i$)$ the first year; $($ii$)$ the second year; $($iii$)$ the third year; $($iv$)$ the fourth year.

b$.$ What is the rate of return of the bond in years $1,2,3,$ and $4?$ Conclude that the expected return equals the forward rate for each

year.

Complete this question by entering your answers in the tabs below.

Required B

Assuming that the expectations hypothesis is valid, compute the expected price of the four$-$year zero coupon bond shown

below at the end of $($i$)$ the first year; $($ii$)$ the second year; $($iii$)$ the third year; $($iv$)$ the fourth year.

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.