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Suppose the interest rate on a 1 - year T - bond is 4 . 0 0 % and that on a 2 - year

Suppose the interest rate on a 1-year T-bond is 4.00% and that on a 2-year T-bond is 7.00%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rates 1 year from now? Do not round your intermediate calculations. Round your final answer to 2 decimal places.
a.6.90%
b.4.58%
C.5.50%
d.10.49%
e.10.09%
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