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Suppose Iyear Teasury bonds yield 4.00% while 2-year T-bonds yield 4.40%. Assuming the pure expectations theory is correct, and thus the maturity risk premium for

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Suppose Iyear Teasury bonds yield 4.00% while 2-year T-bonds yield 4.40%. Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on a 1-year T-bond expected to be one year from now? Round the intermediate calculations to 4 decimal places and final answer to 2 decimal places, Select one a 5.09% b. 5.33 CSIS d. 3.79

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