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The 25-year spot rate is 5%. The 30-year is 6%. Why is the implied 5-year forward rate 25 years from now unrealistic as the market's
The 25-year spot rate is 5%. The 30-year is 6%. Why is the implied 5-year forward rate 25 years from now unrealistic as the market's expectations for interest rates in 25 years? What if the 30-year rate is 4.85%-same question? How would liquidity premiums explain each of these situations
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