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1a) Explain the expectations theory. What are its assumptions? Can it explain the 3 facts about the term structure of interest rate? 1b) Explain the

1a) Explain the expectations theory. What are its assumptions? Can it explain the 3 facts about the term structure of interest rate?

1b) Explain the segmented market theory. What are its assumptions? Can it explain the 3 facts about the term structure of interest rate?

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