Question: Maturity Yield 1 year 6.0% 2 years 6.1% 3 years 6.2% 4 years 6.3% 5 years 6.4% 6 years 6.5% If PEH holds, what will

Maturity Yield 1 year 6.0% 2 years 6.1% 3 years 6.2% 4 years 6.3% 5 years 6.4% 6 years 6.5% If PEH holds, what will be the market expectation of the interest rate on three-year security, 1 year from now? Please show all work and draw the timeline.

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