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mr. Brown is also looking at returns in the treasury market. He knows that the current rate of return on a one year US government
mr. Brown is also looking at returns in the treasury market. He knows that the current rate of return on a one year US government security is 3%. And, he has looked at the rate of return on a two-year US government security, which is 5%. According to the expectations theory, can you please calculate for Mr. Brown the return on a one-year US government security purchased one year from today?
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