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Suppose the interest rates on a 3-year T-bond is 6.00% and that on a 4-year T-bond is 6.90%. Assuming the pure expectations theory is correct,

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Suppose the interest rates on a 3-year T-bond is 6.00% and that on a 4-year T-bond is 6.90%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rate 3 years from now? Calculate the yield using a geometric average. 07.16% O 9.60% O 9.65% O 8.83% O 8.45%

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