Question: QUESTION 6 Assume that the current interest rate on a 1-year bond is 8 percent, the current rate on a 2-year bond is 10 percent,

QUESTION 6 "Assume that the current interest rate on a 1-year bond is 8 percent, the current rate on a 2-year bond is 10 percent, and the current rate on a 3-year bond is 12 percent. If the expectations theory of the term structure is correct, what is the 1-year interest rate expected during Year 22 (Base your answer on an arithmetic rather than geometric average.) (Hint: Interest Rate in Year 1 + Interest Rate in Year 2 = current rate on a 2-year bond x 2)" O 12% 8% 10% 0% 50% QUESTION 7 4 points (Extra C Assume no deductions or adjustments to your taxable income. Your taxable income is $240,000 Click Save and Submit to save and submit Click Save answers to sade all answersa Senegal SLS

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