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Business, 19.02.2020 02:55 kathrynaveda

Assume that the expectations theory holds and that liquidity and maturity risk premiums are zero. The annual rate of interest on a two-year Treasury bond is 10.5 percent and the rate on a one-year Treasury bond is 12 percent. What is the expected one-year interest rate during the second year?

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Assume that the expectations theory holds and that liquidity and maturity risk premiums are zero. Th...
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