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Suppose that all investors expect that interest rates for the 4 years will be as follows:...

Suppose that all investors expect that interest rates for the 4 years will be as follows: Year Forward Interest Rate 0 (today)3 % 1 4 % 2 5 % 3 6 % What is the price of 3-year zero-coupon bond with a par value of $1,000? Multiple Choice $889.08 $816.58 $772.18 $765.55 None of the options are correct.

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Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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