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Suppose the expected path of one-year interest rates over the next five years is 4 percent, 5 percent, 7 percent, 8 percent, and 6 percent.
Suppose the expected path of one-year interest rates over the next five years is 4 percent, 5 percent, 7 percent, 8 percent, and 6 percent. The unbiased expectations theory predicts that today's interest rate on the five-year bond is Multiple Choice 7 percent. 6 percent. 5 percent. 4 percent
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