Use the figure for the question(s)below.
-The current zero-coupon yield curve for risk-free bonds is shown above.What is the risk-free interest rate on a 3-year maturity?
A)3.00%
B)3.15%
C)3.25%
D)6.34%
E)3.50%

Question

Use the figure for the question(s)below. 
-The current zero-coupon yield curve for risk-free bonds is shown above.What is the risk-free interest rate on a 3-year maturity?
A)3.00% 
B)3.15% 
C)3.25% 
D)6.34% 
E)3.50%

Quizplus · Accepted Answer

To find the risk-free interest rate on a 3-year maturity, we locate the point on the graph corresponding to a 3-year maturity and find the corresponding yield on the vertical axis, which is approximately 3.15%. Therefore, the correct choice is B.

Use the Figure for the Question(s)below