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1 0 . Suppose 1 - year Treasury bonds yield 4 . 0 0 % while 2 - year T - bonds yield 5 .

10. Suppose 1-year Treasury bonds yield 4.00% while 2-year T-bonds yield 5.10%. Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on a 1 year T-bond expected to be one vear from now?

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