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A 1-year Treasury bill currently offers a 6% rate of return. A 2-year Treasury note offers a 6.5% rate of return. Under the expectations theory,

A 1-year Treasury bill currently offers a 6% rate of return. A 2-year Treasury note offers a 6.5% rate of return. Under the expectations theory, what rate of return do investors expect a 1-year Treasury bill to pay next year?

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Part 1

The rate of return investors expect a 1-year Treasury bill to pay next year is ____%.

(Round to two decimal places.)

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