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Imagine that the term premium is 0 . You observe that the interest rate on a 1 - year Treasury bond is 3 % and

Imagine that the term premium is 0. You observe that the interest rate on a 1-year Treasury bond is 3% and the interest rate on a 2-year Treasury bond is 5%. The interest rate on a 3-year bond is 6%. What are the expectations for interest rates two years from now?
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