Suppose we observe the following rates: 1R1 = 6%, 1 R2 = 8%. If the...
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Accounting
Suppose we observe the following rates: 1R1 = 6%, 1 R2 = 8%. If the unbiased expectations theory of the term structure of interest rates holds, what is the 1-year interest rate expected one year from now, E(2/1)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Interest rate %
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