7A-5 ZEROS AND EXPECTATIONS THEORY A 2-year, zero coupon Treasury bond with a maturity value of $1,000 has a price of $873.4387. A 1-year, zero coupon Treasury bond with a maturity value of $1,000 has a price of $938.9671. If the pure expectations theory is correct, for what price should 1-year, zero coupon Treasury www bonds sell 1 year from now?
7A-5 ZEROS AND EXPECTATIONS THEORY A 2-year, zero coupon Treasury bond with a maturity value of $1,000 has a price of $873.4387. A 1-year, zero coupon Treasury bond with a maturity value of $1,000 has a price of $938.9671. If the pure expectations theory is correct, for what price should 1-year, zero coupon Treasury www bonds sell 1 year from now?
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 7PROB
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Transcribed Image Text:7A-5 ZEROS AND EXPECTATIONS THEORY A 2-year, zero coupon
Treasury bond with a maturity value of $1,000 has a price of
$873.4387. A 1-year, zero coupon Treasury bond with a maturity
w w m w w h w w
wwww
value of $1,000 has a price of $938.9671. If the pure expectations
w ww
theory is correct, for what price should 1-year, zero coupon Treasury
bonds sell 1
Year
from now?
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