How to use the expectations hypothesis to compute

Reference no: EM13212132

Suppose that the interest rate on one-year bonds is 4 percent today, and is expected to be 6 percent one year from now and 7 percent two years from now and 7.5 percent three years from now. Use the expectations hypothesis to compute and to graph the yield curve for the next three years.

Reference no: EM13212132

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