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Suppose the interest rate on a 1-year T-bond is 2.7% and that on a 3-year T-bill is 3.5%. Assuming the pure expectations theory is correct,

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Suppose the interest rate on a 1-year T-bond is 2.7% and that on a 3-year T-bill is 3.5%. Assuming the pure expectations theory is correct, what is the market's forecast for 2-year rates 1 year from now? 3.90% 3.80% 0 4.00% 0 4.10% 4.20%

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