If the interest rates on one- to five-year bonds are currently 4%, 5%, 6%, 7%, and...

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If the interest rates on one- to five-year bonds are currently 4%, 5%, 6%, 7%, and...

If the interest rates on one- to five-year bonds are currently 4%, 5%, 6%, 7%, and 8%, and the term premiums for one- to five-year bonds are 0%, 0.25%, 0.35%, 0.40%, and 0.50%, predict what the one-year interest rate will be two years from now.

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Answer 1

Answer #1

assumption e assume e tem pzemiurms the quitity Pam 2- (1 , 05) ←一 0.25/ -1 = 5.57ソ The One yeo Roti ete Tuoo yeaws zom noo 3

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Answer 2

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