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Given the Term Structure below: 1 year = 3.4% 2 years = 5% 3 years = 5.5% 4 years = 6.6% 5 years = 7.5%
Given the Term Structure below:
1 year = 3.4%
2 years = 5%
3 years = 5.5%
4 years = 6.6%
5 years = 7.5%
Based on the expectations hypothesis, what does the market expect the 1 year rate in 4 year to be?
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