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Consider the following set of spot rates for maturities out 2 years into the future: Which of the following statements about forward rates and expected

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Consider the following set of spot rates for maturities out 2 years into the future: Which of the following statements about forward rates and expected future spot rates is/are true? (a) 1f2>4% (b) If the Pure Expectations Hypothesis holds, E0[1R2]>3%. (c) If the Liquidity Preference Hypothesis holds, E0[1R2]

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