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You are given the following zero annual spot yields:

1-year y1: 3.0%

2-years y2: 3.5%

3-years y3: 4.0%

4-years y4: 4.5%

Using annual compounding, what is the expected 1-year (short-term) rate of interest in two-year time, according to the liquidity preference theory?

6 days ago

Frank Fordjour
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