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What is the expected one-year rate

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Suppose that the one-year, two-year, and three-year zero-coupon rates are 1.5%, 2.5%, and 5.0%. Based on the expectations theory, what is the expected one-year rate during year 3? Enter the answer in percentage points; for example, if the answer is 5.25%, enter 5.25 rather than .0525.

Reference no: EM133118568

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