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please solve both detailed 7. The one-year interest rate over the next 10 years will be 3%,4.5%,6%,7.5%,9%,10.5%,13%,14.5%,16%, and 17.5%. Using the expectations theory, what will
please solve both detailed
7. The one-year interest rate over the next 10 years will be 3%,4.5%,6%,7.5%,9%,10.5%,13%,14.5%,16%, and 17.5%. Using the expectations theory, what will be the interest rates on a three-year bond, a six-year bond, and a nine-year bond? 8. Using the information from the previous question, assume that investors prefer holding short-term bonds. A liquidity premium of 10 basis points is required for each year of a bond's maturity. What will be the interest rates on a three-year bond, a six-year bond, and a nine-year bondStep by Step Solution
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