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Assume the following series of one-year interest rates over the next five years: 5%, 4%, 4%, 4%, 4% Assuming that the expectations theory is the
Assume the following series of one-year interest rates over the next five years: 5%, 4%, 4%, 4%, 4% Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rate for a 3-year bond. Then calculate for a 5-year bond.
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