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3. Suppose the interest rate on a one-year treasury bond is 2.2%. Suppose the interest rate on a twoyear treasury bond is 3.8%. (a) Using

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3. Suppose the interest rate on a one-year treasury bond is 2.2%. Suppose the interest rate on a twoyear treasury bond is 3.8%. (a) Using the expectations hypothesis, calculate the expected interest rate for a oneyear treasury bond next year. (b) Does the market expect shortterm (1year) interest rates to fall or rise

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