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You buy a two year bond which pays interest of 12% p.a. At the end of year two, you purchase a one year bond that

You buy a two year bond which pays interest of 12% p.a. At the end of year two, you purchase a one year bond that pays interest of 10% p.a. According to the expectations theory of interest rates, you could have purchased a three year bond today that paid interest each year of:

a) 11.0%

b) 11.3%

c) 11.5%

d) cannot be determined

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