Question: Given the Term Structure below: 1 year = 3.4% 2 years = 5% 3 years = 5.5% 4 years = 6.6% 5 years = 7.5%

Given the Term Structure below:

1 year = 3.4%

2 years = 5%

3 years = 5.5%

4 years = 6.6%

5 years = 7.5%

Based on the expectations hypothesis, what does the market expect the 1 year rate in 4 year to be?

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