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Consider the following $1,000 par value zero-coupon bonds: Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate
Consider the following $1,000 par value zero-coupon bonds: Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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