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Suppose we observe the following rates: 1 R 1 = 6 . 7 % , 1 R 2 = 7 . 9 % . If
Suppose we observe the following rates: If the unbiased expectations theory of the term structure of interest rates holds, what is the oneyear interest rate expected one year from now,
Note: Do not round intermediate calculations. Round your percentage answer to decimal places eg
Expected oneyear interest rate
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