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21. Suppose we observe the following rates: Maturity One year,R Yield 690 If the pure expectations theory of the term structure of interest rates holds,

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21. Suppose we observe the following rates: Maturity One year,R Yield 690 If the pure expectations theory of the term structure of interest rates holds, what does the market expect will be the interest rate on three-year securities, two years from now? Two year R 65% Three year. IRI 5.75% Four year, IR, | 6.25% Five year. IRs | 6.5%

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