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Suppose we observe the following rates 1R1 4 1R2 5 If the unbiased expectations theory of the term structure of interest rates holds what is the 1year interest rate expected one year from

Suppose we observe the following rates: 1R1 = 4%, 1R2 = 5%. If the unbiased expectations theory of the term structure of interest rates holds, what is the 1-year interest rate expected one year from now, E(2r1)?(Do not round intermediate calculations and round your answer to the nearest whole percent.)

Interest rate _______________ %
 

Aug 26 2020 View more View Less

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