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Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market rates for different maturities are as follows: 1 year = 3%
Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market rates for different maturities are as follows: 1 year = 3% 2 years = 4.3% 3 years = 5.7% 4 years = 6.9% 5 years = 7.6% What is the implied 1 year interest rate for investing in 4 years?
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