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Assume that the current one-year rate is 4% and investors expect the following future rates. One-year rate for year 2: 5% One-year rate for year
Assume that the current one-year rate is 4% and investors expect the following future rates. One-year rate for year 2: 5% One-year rate for year 3: 6% One-year rate for year 4:8% What is the interest rate for a 4-year issue based on the expectations hypothesis of the term structure of interest rates
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