Currently, the term structure is as follows: one-year bonds yield 7%, two-year zero-coupon bonds yield 8%, three-year and longer maturity zero-coupon bonds all yield 9%. you are choosing between one, two, and three-year maturity bonds all paying annual coupons of 8%. you strongly believe that at year-end the yield curve will be flat at 9%. a. calculate the one year total rate of return for the three bonds. (do not round intermediate calculations. round your answers to 2 decimal places.) b. which bond you would buy? one-year bond two-year bond three-year bond

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.