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5 points SA QUESTIONS Assume that the expectations theory holds, and that liquidity and maturity risk premiums are zero. If the annual rate of interest

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5 points SA QUESTIONS Assume that the expectations theory holds, and that liquidity and maturity risk premiums are zero. If the annual rate of interest on a 2 year Treasury bond is 10.5 percent and the rate on a 1-ye Treasury bond is 12 percent, what rate of interest should you expect on a 1-year Treasury bond one year from now? For the toolbar, press ALTAF10(POor ALT FN F10 (Mac). B TV5 Paragraph Arial 10pt 2 !!! IT A

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