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Assume that you make investment decisions based on the expectations theory. Based on research, you have obtained the following information about certain market interest rates:
Assume that you make investment decisions based on the expectations theory. Based on research, you have obtained the following information about certain market interest rates: You can borrow at 5% and lend at 4.5% for one year. You can borrow at 6% and lend for 6.5% for two years One-year rate one year from now is 7% for borrowing and lending What decision is the most profitable for you? Show your calculations. already solved is not correct solve in a correct way
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