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Assume that the current interest rate on a one-year bond is 8%, the current rate on a two-year bond is 10%, and the current rate

Assume that the current interest rate on a one-year bond is 8%, the current rate on a two-year bond is 10%, and the current rate on a three-year bond is 12%. If the expectations theory of the term structure is correct, what is the one-year interest rate expected during Year 3? Show your work.

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