Question: Given the Term Structure below: 1 year = 3 . 1 % 2 years = 4 . 2 % 3 years = 6 % 4

Given the Term Structure below:
1 year =3.1%
2 years =4.2%
3 years =6%
4 years =6.6%
5 years =7.8%
Based on the expectations hypothesis, what does the market expect the 1 year rate in 4 year to be?

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