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The interest rate on one-year Treasury bonds is 0.7 percent, the rate on two-year Tibonds...

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Finance

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The interest rate on one-year Treasury bonds is 0.7 percent, the rate on two-year Tibonds is 0.8 percent, and the rate on three-year T-bonds is 0.9 percent. a. Using the expectations theory, compote the expected one-yeyc intecest rate in the second year (Yeat 2 . only). Round your answer to one decimal place. b. Using the expectations theory, compute the expected one-year interest rate ir the thicd year cyear 3 pmiv?) Round rour answer to one decimal place

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