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Suppose that the interest rate on one-year bonds is currently 4% and is expected to be 5% in one year and 6% in two years.

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Suppose that the interest rate on one-year bonds is currently 4% and is expected to be 5% in one year and 6% in two years. Using the expectations theory, the yield on the three-year bond is: About 8% About 5% About 6\% About 7%

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