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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 = 4.6%
3 years = 5.8%
4 years = 6.7%
5 years = 7.1%
What is the implied 2 year interest rate for investing in 3 years?
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