Interest rates predicted by the pure expectations? theory

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The? 1-year interest rate is 7%. The? 1-year interest rate expected in 1 year is 5%. The? 1-year interest rate expected in 2 years is 7%. What are the? 2-year and? 3-year interest rates predicted by the pure expectations? theory?

The? two-year spot rate is _____?%.(Round to two decimal? places).

The? three-year spot rate is ____ ?%. (Round to two decimal? places).

Reference no: EM131327188

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