Suppose you observe the following for today's term structure for risk-free securities: Effective Annual YTM 1-Year zero-coupon bond:8% 2-Year...

3-Year zero-coupon bond:3.4%

a.    Suppose you believe that the term structure next year will be the same as today's term structure. If today you buy the 3-year zero coupon bond, what do you expect your holding period return will be between now and one year from today?

b.    What should be today's yield to maturity on a 3-year, 8% annual coupon risk-free bond? (Express as accurate as 1.234%)

Please show all work and no excel calculations