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What Would the Yield to Maturity Be on a Rate

Question 61

Multiple Choice

 Year  1 Year Forward Rate 14.5%25.2%35.9%46.3%56.8%67.0%\begin{array}{cc}\text { Year } & \text { 1 Year Forward Rate } \\1 & 4.5\% \\2 & 5.2\% \\3 & 5.9\% \\4 & 6.3\% \\5 & 6.8 \% \\6 & 7.0\%\end{array}
. What would the yield to maturity be on a four-year zero-coupon bond purchased today?


A) 7.80%
B) 6.30%
C) 5.47%
D) 4.25%
E) None of the options are correct.

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