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If the one-year spot rate is 4% and the forward rates for years 2, 3, 4, 5 are 5%, 7%, 8%, and 6%, respectively, then
If the one-year spot rate is 4% and the forward rates for years 2, 3, 4, 5 are 5%, 7%, 8%, and 6%, respectively, then todays interest rate on a five-year bond should be
4%
5%
6%
7%
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