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The current yield curve is inverted. The spot rates for zero-coupon bonds for the next few years are provided below. Due to a data glitch,
The current yield curve is inverted. The spot rates for zero-coupon bonds for the next few years are provided below. Due to a data glitch, the spot rate for this year (year 1) is missing. What is the inferred short rate for the third year? Year 2 3 4 5 6 Spot rate %) 2.49 2.41 2.21 2.32 2.68 0 2.25% O 2.76% 9.02% 4.50% O 1.61%
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