What is the interest rate for a 5-year issue

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Assume that the current one-year rate is 3% and investors expect the following future rates:

One-year rate for year 2: 3.5% One-year rate for year 3: 3.7% One-year rate for year 4: 3.7% One-year rate for year 5: 4.0%

What is the interest rate for a 5-year issue based on the expectations hypothesis of the term structure of interest rates?

Reference no: EM132955722

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