The following is a list of prices for zero-coupon bonds of various maturities. Calculate the yields to maturity of each bond and the imlied sequence of forward rates. Assuming that the expectations hypothesis is valid, compute the expected as price path of the 4-year bond as time passes. What is the rate of return of the bond in each year? show that the expected return equals the forward rate for each year.
maturity(years) price of Bond
1 $943.40
2 898.47
3 847.62
4 792.16