According to the Expectations Theory of the Term Structure of Interest,if

question 28

Multiple Choice

According to the expectations theory of the term structure of interest,if the 1-year bond rate today is 6% p.a.and the 3-year bond rate today is 7.5% p.a. ,what is the 2-year bond rate next year?

• A)7.25%
• B)7.75%
• C)8.25%
• D)8.75%

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