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Type of Bond Yield 1- year 0.2% 2- year 0.3 3- year 0.5 Using the expectations theory, compute the expected one-year interest rates in (a)the

Type of Bond Yield
1- year 0.2%
2- year 0.3
3- year 0.5

Using the expectations theory, compute the expected one-year interest rates in

(a)the second year (Year 2 only) and

(b)the third year (Year 3 only).

The bonds have no risk premiums.

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