Question: I need the answer with the full steps please Expectations Theory (example) Suppose that a 5-year Treasury note currently offers a 3% annual return. Investors
Expectations Theory (example) Suppose that a 5-year Treasury note currently offers a 3\% annual return. Investors believe that interest rates are going to decline, and 5 years from now, they expect the rate on a 5-year Treasury note to be 2.5%. According to the expectations theory, what is the return that a 10 -year Treasury note has to offer today? What does this imply about the slope of the yield curve
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