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The 1-year interest rate is 6%. The 1-year interest rate expected in 1 year is 8%. The 1-year interest rate expected in 2 years
The 1-year interest rate is 6%. The 1-year interest rate expected in 1 year is 8%. The 1-year interest rate expected in 2 years is 10%. What are the 2-year and 3-year interest rates predicted by the pure expectations theory?
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Under the pure expectations theorythe expected future spot rates are equal to the current forward ra...
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Introduction To Corporate Finance
Authors: Laurence Booth, Sean Cleary
3rd Edition
978-1118300763, 1118300769
