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(c)ANSWER : Applying the expectations theory, a bank depositor chooses between purchasing a one- year CD paying 5 percent and a two-year CD paying 5.5
(c)ANSWER : Applying the expectations theory, a bank depositor chooses between purchasing a one- year CD paying 5 percent and a two-year CD paying 5.5 percent. If indifferent between the two, the depositor must expect one-year CDs one year from now to have a rate of a. 6.5% b. 4.5% c. 6.0% d. 5.0% SHOW ME HOW THEY CALCULATED THIS ANSWER EITHER STEP BY STEP OR THROUGH FINANCIAL CALCULATOR KEYS
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