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Consider the expectations theory of the term structure. Assuming that the short-term (1 period) interest rate today is 2 percent, and that the short- term
Consider the expectations theory of the term structure. Assuming that the short-term (1 period) interest rate today is 2 percent, and that the short- term (1 period) interest rates are expected to be 3 percent and 4 percent in the next years, what is the 3-period interest rate today? O2 percent 5 percent 3 percent 09 percent
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