The one year spot rate is currently six percent (6%); the one year spot rate...
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The one year spot rate is currently six percent (6%); the one year spot rate one year from now will be seven percent (7%); and the one year spot rate two years from now will be eight percent (8%). Under the UEH what must today's three year spot rate be? Suppose the three year spot rate is actually nine percent (9%), how could you take advantage of this? Explain.
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