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2) The one-year interest rates over the next five years are expected to be 5%, 6%,7%, 8% and 9%. Given this information, what are

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2) The one-year interest rates over the next five years are expected to be 5%, 6%,7%, 8% and 9%. Given this information, what are the interest rates on a two-year bond and a five-year bond? Explain what is happening to the yield curve. 4 marks

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