Question: QUESTION 17 Lets assume that the expectation theory is correct (investor does not care about maturity) and the expectations for 1year bonds are -2% in

QUESTION 17 Lets assume that the expectation theory is correct (investor

QUESTION 17 Lets assume that the expectation theory is correct (investor does not care about maturity) and the expectations for 1year bonds are -2% in 2017 4% in 2018 6% in 2019 The required yield to maturity for a 1-year bond is The required yield to maturity for a 2-year bond is The required yield to maturity for a 3-year bond is The resulting yield curve is sloping

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