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please show your work 4. Suppose the interest rate on a 2-year T-bond is 6.0% and that on a 3-year T-bond is 6.2% and that

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4. Suppose the interest rate on a 2-year T-bond is 6.0% and that on a 3-year T-bond is 6.2% and that on a 4-year T-bond is 6.4% Assuming the pure expectations theory is correct, what is the market's forecast for 2-year rates, 2 year from now (forward rate rza)? 5 What are both the four micro factors and the four maczofactors which affect the level of interest rates? Explain

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