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Zero-Coupon Bonds Maturing in 1,2,and 3 Years Have Prices of 0.9345,0.8766,and

Question 4

Multiple Choice

Zero-coupon bonds maturing in 1,2,and 3 years have prices of 0.9345,0.8766,and 0.8212,respectively.What is the forward price for a 1-year bond purchased in year 2?


A) 0.6866
B) 0.7234
C) 0.8787
D) 0.9368

Correct Answer:

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