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Consider the following $ 1 , 0 0 0 par value zero - coupon bonds: Required: According to the expectations hypothesis, what is the market's
Consider the following $ par value zerocoupon bonds:
Required:
According to the expectations hypothesis, what is the market's expectation of the yield
curve one year from now? Specifically, what are the expected values of next year's
yields on bonds with maturities of a one year? b two years? c three years?
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