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QUESTION

Consider the following yields (spot rate) on zero coupon bonds, today December 2017 Maturity (year) Yield 1 year (dec 2018)

Consider the following yields (spot rate) on zero coupon bonds, today December 2017

              Maturity (year)                                 Yield

             1 year   (dec 2018)                           0.07

             2 year  (dec 2019)                           0.010

1     what is the expected price of the one year, 0 coupon bond?

2     what is the expected yield of a 1-year security expected to be issued one year from December 2018?

3     what is the future price of a one year, 0 coupon bond that will be issued one year from December

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