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A one-year T-bond rate is currently 3% and the one-year rate in 12 months is expected to be 2.5% in addition to a liquidity premium
A one-year T-bond rate is currently 3% and the one-year rate in 12 months is expected to be 2.5% in addition to a liquidity premium of 0.25%. Based on this information, what do expect the two-year T-bond rate to currently be?
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