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TB MC Qu. 06-10 Unbiased Expectations Theory Suppose
that the current one-year ...
Unbiased Expectations Theory Suppose that the current one-year rate
(one-year spot rate) and expected one-year T-bill rates over the following
three years (i.e., years 2, 3, and 4, respectively) are as follows:
1R1 = 6.00%, E(21) = 6.50%, E(371) = 7.50% E(41) = 8.00%
Using the unbiased expectations theory, what is the current (long-term)
rate for four-year-maturity Treasury securities?

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