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Analysis of term structure of risk-free interest rates. Year 1 yield 1%, Year 2 yield 2%, Year 3 yield 3%, Year 4 yield is 3.5%

Analysis of term structure of risk-free interest rates.

Year 1 yield 1%, Year 2 yield 2%, Year 3 yield 3%, Year 4 yield is 3.5%

Assume you buy 3-year bond above and you sell it after one year. What is the expected return on this investment?

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