A two-year zero-coupon Treasury bond with a maturity value of R1,000 has a price of R873.4387.A one-year zero-coupon Treasury bond with a maturity value of R1,000 has a price of R938.9671.If the pure expectations theory is correct, for what price should one-year zero-coupon Treasury bonds sell one year from now?
A) R798.89
B) R824.66
C) R852.28
D) R930.23
E) R989.11
Correct Answer:
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