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Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity YTM(%) A 1 6.5% B 2 7.5 C 3 8.0 D 4 8.5

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

Bond Years to Maturity YTM(%)

A 1 6.5%

B 2 7.5

C 3 8.0

D 4 8.5

According to the expectations hypothesis, what is the expected 1-year interest rate 3 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) Interest rate %

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