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Graph the term structure of interest rates

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Reference no: EM132703721

The following pattern for one-year Treasury bills is expected over the next four years:

Year 1: 1%

Year 2: 2%

Year 3: 3%

Year 4: 4%

a. What return would be necessary to induce an investor to buy a

i. two-year security

ii. three-year security

iii. four year security

b. Graph the term structure of interest rates for years 1 through 4.

Reference no: EM132703721

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