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Suppose that the interest rate on one-year bonds is currently 5 percent and is expected to be 3 percent in one year and 3 percent

Suppose that the interest rate on one-year bonds is currently 5 percent and is expected to be 3 percent in one year and 3 percent in two years. Using the Expectations Hypothesis, compute the yield curve for the next three years.

1. Yield for one-year bond =

2. Yield for two-year bond =

3. Yield for three-year bond =

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