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Assume a 2-year bond has a rate of 6.1% and a 1-year bond has a rate of 5.7%. In order for an investor to meet
Assume a 2-year bond has a rate of 6.1% and a 1-year bond has a rate of 5.7%. In order for an investor to meet equilibrium by investing their yield from a 1-year bond into a subsequent 1-year bond, what would the one-year bond rate need to be when the yield was re-invested for the subsequent one-year term? a. 5.9% b. 6.1% c. 6.2% d. 6.3% e. 6.5%
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