Question: = - 1% , i2t 5%. Imagine that in a given point in time we observe that i1t 3% , and i3t Furthermore assume that

= - 1% , i2t 5%. Imagine that in a given

= - 1% , i2t 5%. Imagine that in a given point in time we observe that i1t 3% , and i3t Furthermore assume that short term interest rates are expected to remain constant. What is the term premium associated with a three period bond? 0% 2% 4% None of the above

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