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    Macroeconomics Study Set 47
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    Exam 15: Financial Markets and Expectations
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    Assume That the Current One- Year Rate Is 5% and the Two-
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Assume That the Current One- Year Rate Is 5% and the Two-

Question 56

Question 56

Multiple Choice

Assume that the current one- year rate is 5% and the two- year rate is 9%. Given this information, the one- year rate expected one year from now is:


A) 21%.
B) 13%.
C) 17%.
D) 3%.
E) 7%.

Correct Answer:

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