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Today, you observed the following information in the bond-related market. All the rates are annualised. it is the current interest rate for a T-year bond,
Today, you observed the following information in the bond-related market. All the rates are annualised. it is the current interest rate for a T-year bond, i* 1,1 is the expected interest rate (of a 1- year bond) invested at time t. Interest Rate Future Expected Interest Rate ii 5.23% (Missing 3) iz (Missing 1) 4.62% (Missing 2) 4.61% i 1,0 ie 1,1 ie 1,2 a) Using the Expectations Theory, fill the three missing spaces in the above table with detailed steps and then briefly comment on your results
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