Question

Deriving Current Interest Rates. Assume that interest rates for one-year securities are expected to be 0.08...

Deriving Current Interest Rates. Assume that interest rates for one-year securities are expected to be 0.08 today, 0.1 one year from now and 0.04 two years from now. Using only the pure expectations theory, what are the current interest rates on three-year securities. Enter the answer as a decimal using 4 decimals (e.g. 0.1234).

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