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Assume the pure expectations hypothesis (or theory) holds and you observe the following Treasury bond rates. What is the expected one-year Treasury yield two years

Assume the pure expectations hypothesis (or theory) holds and you observe the following Treasury bond rates. What is the expected one-year Treasury yield two years from today?

Years to Maturity

Yield

1

2.0%

2

3.2%

3

4.0%

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