Term-structure theories, Term-structure theories The

Term-structure theories

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Term-structure theories The one-year spot interest rate is r1 = 6.4%, and the two-year rate is r2 = 7.4%. If the expectations theory is correct, what is the expected one-year interest rate in one year’s time? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Reference no: EM131886497

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