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Suppose the 5-year Treasury bonds yield 5.60% while 7-year T-bonds yield 6.10%. Assuming the pure expectations theory is correct, and thus the maturity risk premium
Suppose the 5-year Treasury bonds yield 5.60% while 7-year T-bonds yield 6.10%. Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on a 2-year T-bind expected to be five years from now?
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