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problem: Assume the interest rate on a first year T-bond is 5.0% and that on a 2-year T-bond is 6.0 percent.  Suppose the pure expectations theory is correct, determine the market's forecast for one year rates one year from now?                                     

[A]       6.83%

[B]       7.01%

[C]      6.65%

[D]       6.74%

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