Page 1: 1 Page 2: 2 Previous Page Next Page Page 22 of 24 For numeric answers, unless instructed otherwise, enter dollar values to the nearest cent (two decimal places) and enter rates as percentages, also with two decimal places (or you may lose points). Do not include dollar signs or commas. For units, abbreviate dollars as $, percent as %, years as yy and times as X. Question 22 (4 points) Suppose that 1-year interest rates expected for the next 5 years are as follows: Year Year 1 Year 2 Year 3 Year 4 Year 5 1-year rate 2.00% 5.00% 4.25% 5.25% 6.25% According to the (unbiased/pure) expectations theory, the interest rate for a 5-year loan should be (approximately): Your Answer: Page 3 3 Page 4 4 Page 5: 1 5 Answer units Previous Page Next Pa Page 22 of 24