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Suppose the yield on a two-year Treasury bond is 5 percent and the yield on a one-year Treasury bond is 4 percent. If the maturity
Suppose the yield on a two-year Treasury bond is 5 percent and the yield on a one-year Treasury bond is 4 percent. If the maturity risk premium (MRP) on these bonds is zero (0), what is the expected one-year interest rate during the second year (year 2)?
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