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Using the Expectations Theory of the term structure, calculate the interest rates in the term structure...

Using the Expectations Theory of the term structure, calculate the interest rates in the term structure for maturities of 1 to 5 years for the following paths of one year interest rates over the next five years. Explain for each what the yield curve would look like.


3% 4% 5%   6%   7%


3% 2% 1%   1%   2%


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