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QUESTIONS Suppose that the current one-year zero-coupon rate is 1.5% and that the expected one-year rate during each of the subsequent 4 years is 2.0%
QUESTIONS Suppose that the current one-year zero-coupon rate is 1.5% and that the expected one-year rate during each of the subsequent 4 years is 2.0% 2.5% 3.0% and 3.5%. Under the pure expectations theory, what is the current Z-year zero-coupon interest rate? Use the approximation from class
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