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Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4,
Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1=0.5%,E(2r1)=1.5%,E(3r1)=9.9%,E(4r1)=10.25% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and fouryear-maturity Treasury securities. (Round your percentage answers to 3 decimal places. (e.g., 32.161)) Answer is complete but not entirely correct
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