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Problem 15-10 The term structure for zero-coupon bonds is currently: Maturity (Years) YTM (%) 5.0%...

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Problem 15-10 The term structure for zero-coupon bonds is currently: Maturity (Years) YTM (%) 5.0% 6.0 7.0 Next year at this time, you expect it to be: Maturity (Years) YTM (%) 6.0% 7.0 8.0 3 a. What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond? (Round your answer to 1 decimal place.) Rate of return % b-1. Under the expectations theory, what yields to maturity does the market expect to observe on 1- and 2-year zeros at the end of the year? (Round your answers to 2 decimal places.) YTM Maturity 1 2 % %

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