Suppose yields on a one-year bond are at 05 on a two-year, Ask an Expert

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Suppose yields on a one-year bond are at 0.5 %, on a two-year bond are at 0.8 %, and on a three-year bond are at 1%. What does this imply about future short-term interest rates if the expectations theory of the yield curve is valid. Calculate the future short-term expected interest rates. Show your work.

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