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Assume that as of today, the annualized interest rate on a four - year security is 3 . 5 % , while the annualized interest

Assume that as of today, the annualized interest rate on a four-year security is 3.5%, while the annualized interest rate on a three-year security is 2.5%. Based on the pure expectations, what is estimate of the one-year forward rate three years from now?

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