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The 1-year interest rate is 7 % The 1-year interest rate expected in 1 year is 5 %. The 1-year interest rate expected in 2

The 1-year interest rate is

7 %

The 1-year interest rate expected in 1 year is

5 %.

The 1-year interest rate expected in 2 years is

7 %

What are the 2-year and 3-year interest rates predicted by the pure expectations theory?

The two-year spot rate is? (Round to two decimal places).

The three-year spot rate is?

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