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The Wall Street Journal reports that the current rate on 5-year Treasury bonds is 2.60 percent and on 10-year Treasury bonds is 4.85 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a 5-year Treasury bond purchased five years from today, E(5r5). (Do not round intermediate calculations and round your answer to 2 decimal places.)

Expected rate %

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Financial Management, Finance

Category:- Financial Management
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