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The Following Is a List of Prices for Zero-Coupon Bonds  Maturity  (Years)  Price 1$943.402881.683808.884742.09\begin{array}{cc}\text { Maturity }\\\text { (Years) } & \text { Price } \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.09\end{array}

Question 6

Multiple Choice

The following is a list of prices for zero-coupon bonds with different maturities and par values of $1,000.  Maturity  (Years)   Price 1$943.402881.683808.884742.09\begin{array}{cc}\text { Maturity }\\\text { (Years) } & \text { Price } \\1 & \$ 943.40 \\2 & 881.68 \\3 & 808.88 \\4 & 742.09\end{array} According to the expectations theory, what is the expected forward rate in the third year?


A) 7.00%
B) 7.33%
C) 9.00%
D) 11.19%
E) None of the options are correct.

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