Q. consider the following $1,000 par value zero-coupon bonds:
| Bond | Years to Maturity | YTM |
| A | 1 | 3% |
| B | 2 | 4% |
| C | 3 | 5% |
| D | 4 | 6% |
a. What is the expected 1-year interest rate in the 3 rd year?
b. What will be the price of the 2-year zero-coupon bond after 2 years?
c. Suppose, next year, you consider buying 3-year zero-coupon bond and holding it for 2 years. What will be the realized compound return?
