A 2-year, zero coupon Treasury bond with a maturity value of $1,000.00 has a price of $881.6593. A 1-year, zero coupon Treasury bond with a maturity value of $1,000.00 has a price of $943.3962. If the pure expectations theory is correct, for what price should 1-year, zero coupon Treasury bonds sell one year from now? Do not round your intermediate calculations.
A. $1,112.13
B. $943.90
C. $831.76
D. $766.34
E. $934.56
Answer: E
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