Question: Table below reports information on zero coupon bonds H and I. Bond Effective Annual Yield Time to Maturity Face Value H 4.04% 6 months $100.00

Table below reports information on zero coupon bonds H and I.

Bond	Effective Annual Yield	Time to Maturity	Face Value
H	4.04%	6 months	$100.00
I	4.5%	12 months	$100.00

Under the expectations hypothesis, in 6 months, price of Bond I will be _________. Under the liquidity preference theory, its price will be _________.

a.$97.6; higher than $97.6

b.$99.6; higher than $99.6

c.$99.6; lower than $99.6

d.$97.6; lower than $97.6

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