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Question 8 (1 point) Suppose that the yield on a l year Treasury is 2 percent, the yield on a 2-year Treasury is 4 percent,
Question 8 (1 point) Suppose that the yield on a l year Treasury is 2 percent, the yield on a 2-year Treasury is 4 percent, and the yield on a 3-year Treasury is 6 percent. The real risk free rate is a constant 2 percent per year and MRP = 0. Calculate the expected interest rate on a 1 year Treasury security, one year from now a) 2% Ob) 4% OC) 6% d) 8%
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