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Suppose the current rate of interest on 30-year fixed rate mortgages is 7 percent. Suppose further the current rate on 10-year fixed rate mortgages is

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Suppose the current rate of interest on 30-year fixed rate mortgages is 7 percent. Suppose further the current rate on 10-year fixed rate mortgages is 6 percent. Using the techniques we learned in class, predict what the 20 year mortgage rate will be 10 years from today. You believe the expectations theory of the term structure of interest rates prevails in the market. For this problem, carry out your computations to at least five decimal places. O A. 0.075 or 7.5 percent O B. 0.037 or 3.7 percent OC. 0.0425 or 4.25 percent O D.0.090 or 9.0 percent O E. more than 9 percent

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