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Assume the following rates are currently observable: Current 1-year spot rate (_1 R_1) = 6%; Expected 1 -year spot rate one year from now (_2

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Assume the following rates are currently observable: Current 1-year spot rate (_1 R_1) = 6%; Expected 1 -year spot rate one year from now (_2 E_1) = 7% Expected 1 -year spot rate two years from now (-3 E_1) = 8% Under the Unbiased Expectations Theory (UET) what must today's observed 3-year spot rate (_1 R_3) be? [, circle your answer.]

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