(Answered) The interest rate on one-year treasury bonds is 1 the rate

Engineering

The interest rate on one-year treasury bonds is 1%, the rate on two-year treasury bonds is 0.9%, and the rate on three-year treasury bonds is 0.8%. Using the expectations theory, compute the expected one-year interest rates in (a) the second year (year 2 only) and (b) the third year (year 3 only).

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