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Homework answers / question archive / YIELD CURVE FOR ZERO COUPON BONDS RATED AA 1 year - 8% 2 year - 8

YIELD CURVE FOR ZERO COUPON BONDS RATED AA

1 year - 8%

2 year - 8.11%

3 year - 8.2%

4 year - 8.5%

5 year - 8.75%

6 year - 8.85%

7 year - 9.15%

8 year - 9.25%

9 year - 9.35%

10 year - 9.47%

11 year - 9.52%

12 year - 9.77%

13 year - 10.45%

14 year - 10.65%

15 year - 10.75%

16 year - 10.95%

17 year - 11%

18 year - 11.25%

Assume that there are no liquidity premiums.

To the nearest basis point, what is the expected interest rate on a four-year maturity AA zero coupon bond purchased six years from today?

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