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Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A 1 5.4% B 2 6.4 C 3 6.9 D

Consider the following $1,000 par value zero-coupon bonds:

Bond Years until Maturity Yield to Maturity A 1 5.4% B 2 6.4 C 3 6.9 D 4 7.4

According to the expectations hypothesis, what is the markets expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Interest rate %

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