Suppose that the term structure today is given as follows: ...
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Finance
- Suppose that the term structure today is given as follows:
| Time to maturity | YTM |
| 1 | 1.2% |
| 2 | 1.6% |
| 3 | 2.1% |
| 4 | 2.9% |
Suppose your investment horizon is 4 years, and you are considering buying a coupon bond with par 1000, coupon rate 3%, paying once a year.
Assume you believe in the expectations hypothesis. What is your expected realized yield?
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