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Assume the yield on a pure discount bond with a two-year maturity is 5.45% and the yield on a pure discount bond with a one-year
Assume the yield on a pure discount bond with a two-year maturity is 5.45% and the yield on a pure discount bond with a one-year maturity is 5.15%. If you purchased the two-year bond, and sold it after one year, what would your one-year return be assuming the pure expectations theory is correct?
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