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10. You observe the following market interest rates, for both borrowing and lending: one-year rate =5% two-year rate =6% one-year rate one year from now

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10. You observe the following market interest rates, for both borrowing and lending: one-year rate =5% two-year rate =6% one-year rate one year from now =7.25% 10. You observe the following market interest rates, for both borrowing and lending: one-year rate =5% two-year rate =6% one-year rate one year from now =7.25%

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