Question
The one-year spot interest rate is r 1 = 5.3%, and the two-year rate is r 2 = 6.3%. If the expectations theory is correct,
The one-year spot interest rate is r1 = 5.3%, and the two-year rate is r2 = 6.3%. If the expectations theory is correct, what is the expected one-year interest rate in one years time? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Expected interest rate %
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Introduction To Finance Markets, Investments, And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
17th Edition
1119561175, 978-1119561170
