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Years to Maturity Yields to Maturity 1 10% 2 11% 3 12% Assume that the pure expectations hypothesis of the term structure is correct. If

Years to Maturity Yields to Maturity
1 10%
2 11%
3 12%

Assume that the pure expectations hypothesis of the term structure is correct. If market expectations are accurate, what will the pure yield curve (that is, the yields to maturity on one- and two-year zero-coupon bonds) be next year?

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