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The one-year spot interest rate is 8% and the annual interest rate on a two-year bond is 6%. What is the expected one-year interest rate
The one-year spot interest rate is 8% and the annual interest rate on a two-year bond is 6%. What is the expected one-year interest rate in one years time?
(Be sure to compound over the two years; don't just add 6% and 6%.) Write your answer as a percent to two digits, e.g., write 2.22% as 2.22
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