Question: 5. Interest Rates: Using the Yield Curve to Estimate Future Interest Rates regarding future inflation, risk, and short-term interest rates. The theory states that the

 5. Interest Rates: Using the Yield Curve to Estimate Future Interest

5. Interest Rates: Using the Yield Curve to Estimate Future Interest Rates regarding future inflation, risk, and short-term interest rates. The theory states that the shape of the yield curve depends on investors' expectations about future and sell securities until the market was in equilibrium. Quantitative Problem: Today, interest rates on 1-year T-bonds yield 1.5\%, interest rates on 2-year T-bonds yield 2.2\%, and interest rates on 3-year T-bonds yield 3.5\%. calculations. Round your answer to four decimal places. % calculations. Round your answer to four decimal places. % calculations. Round your answer to four decimal places. %

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