Multiple Choice
According to the Expectations Theory of the term structure, if interest rates are expected to be 2%, 2%, 4%, and 5% over the next four years, which yield is the closest to the yield on a three-year bond today?
A) 2.7%
B) 4%
C) 4.3%
D) 8%
Correct Answer:
Verified
Correct Answer:
Verified
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