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Use the German Yield Curve from the attached spreadsheet. What does the market expect the 1-year rate to be in 1 year? Hint: use the

Use the German Yield Curve from the attached spreadsheet. What does the market expect the 1-year rate to be in 1 year? Hint: use the same comparison of buy-and-hold vs. rollover returns but with annual compounding.

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German Yield Curve Year Zero Rate 1 1.00% 2 1.73% 3 2.24% 4 2.65% 5 3.00% 6 3.32% 7 3.61% 8 3.87% 9 4.12% 10 4.36%

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