What are interest rate today on a 2-year bond

Reference no: EM13203513

suppose that the interest rate on a one year bond is 7 percent today and the interest rates expected on one year bonds in the future are 6 percents in one year, 5 percent in 2-year , and 4 percent in three years bond.

a. according to the exceptions theory of the term structure, what are interest rate today on a 2-year bond, a three year bond and a for year bond?

Reference no: EM13203513

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