Question: a ) How much should a ( one ) five - year bond's interest rate be in 2 0 2 5 based on the term

)

How much should a

(

one

)

five

-

year bond's interest rate be in

2025

based on the term structure's expectations theory?

)

What difference would there be between the five

-

year bond's interest rate and its value based on the expectations theory if the bond markets adhered to the liquidity premium theory of the term structure instead? Give a succinct explanation of your response.

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