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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 = 3.4%

Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market rates for different maturities are as follows: 1 year = 3.4% 2 years = 4.2% 3 years = 5.1% 4 years = 6.5% 5 years = 7.8% What is the implied 2 year interest rate for investing in 3 years?

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