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You are a financial consultant analyzing the bond market for a client interested in understanding the dynamics of interest rates and planning their investment strategy
You are a financial consultant analyzing the bond market for a client interested in understanding the dynamics of interest rates and planning their investment strategy accordingly. Current market data and forecasts present the following information:
The current yield on a oneyear Treasury bond is
The market expects that one year from now, the yield on a oneyear Treasury bond will be
Given these market conditions and assuming the pure expectations theory holds true, calculate the yield today for a year Treasury bond. Please answer with decimals.
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