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The current interest rate on the one-year bond is 5%. The 1yr interest rates over the next four years are expected to be 6%, 7%,

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The current interest rate on the one-year bond is 5%. The 1yr interest rates over the next four years are expected to be 6\%, 7\%, 8\%, and 9% (i.e. it+1e=6% ) Suppose it and it+1e increase both by 1 percent point (5\% to 6%, and 6% to 7% respectively). According to the Expectations Theory, what is the change in the interest rate on a 2-yr bond? For example, if the initial interest rate is 5% and the new interest rate is 8%, the change is 3%. You would input 3 (no \% symbol) The current interest rate on the one-year bond is 5%. The 1yr interest rates over the next four years are expected to be 6\%, 7\%, 8\%, and 9% (i.e. it+1e=6% ) Suppose it and it+1e increase both by 1 percent point (5\% to 6%, and 6% to 7% respectively). According to the Expectations Theory, what is the change in the interest rate on a 2-yr bond? For example, if the initial interest rate is 5% and the new interest rate is 8%, the change is 3%. You would input 3 (no \% symbol)

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