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Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 4.3% r2 = 4.9% r3 = 5.6% r4
Consider the following spot interest rates for maturities of one, two, three, and four years.
r1 = 4.3% r2 = 4.9% r3 = 5.6% r4 = 6.4%
Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next four years?
Use the Fisher hypothesis and the unbiased expectations theory
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