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One-year government bonds yield 6% and 2-year government bonds yield 5.5%. Assume the expectations theory holds. What does the market believe the rate on 1-year

One-year government bonds yield 6% and 2-year government bonds yield 5.5%. Assume the expectations theory holds. What does the market believe the rate on 1-year government bonds will be one year from today? 5% 5.5% 5.75% 6% 7%

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