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The term structure of interest rates is as follows: 1-year rate = 5.5% 2-year rate = 6.2 3-year rate = 6.8 What does the market

The term structure of interest rates is as follows:

  • 1-year rate = 5.5%
  • 2-year rate = 6.2
  • 3-year rate = 6.8

What does the market expect the one-year rate to be two years from today? Write your answer out to four decimals

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