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An investment has the following payment structure: 1,000 payable in one year, 1,000 payable in...

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Finance

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An investment has the following payment structure: 1,000 payable in one year, 1,000 payable in two years, and 1,000 payable in three years. The term structure of interest rates is: Length of Investment Interest Rate 1 year 6% 2 year 7% 3 year 8% If the investment is purchased now at its value based on the term structure of interest rates, what is the overall yield rate on this investment? 7.1% 7.3% 7.4% 7.5%

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