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Suppose the interest rate on a 1-year zero-coupon bond is currently 12% and is expected to fall to 6% in one year and then stay

Suppose the interest rate on a 1-year zero-coupon bond is currently 12% and is expected to fall to 6% in one year and then stay there for a long time. Then according to the pure expectations hypothesis of the term structure, the current interest rate on a 2-year zero-coupon bond should be approximately _____ and the current interest rate on a 3-year zero coupon bond should be approximately _____.

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A. 9.0, 8.0

B. 6.0, 6.0

C. 12.0, 9.0

D. 9.0. 6.0

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