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12.) Suppose the 2-year spot rate 4% and the 5-year spot rate 8%. The annual liquidity premium is 1%. According the expectation theory, what is

12.)

Suppose the 2-year spot rate 4% and the 5-year spot rate 8%. The annual liquidity premium is 1%. According the expectation theory, what is the expected 3-year spot rate, 2 years from now?

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