2. The table below shows current and expected future one-year interest rates. Suppose the Expectations Theory is valid. Calculate the long-term interest rates for 2, 3 and 4- year bonds based on the pure Expectations Theory. (If you show your work, you can get partial credit even final answer is not correct) 2 year bond 3 year bond 4 year bond One-year (short term) rates Today Expected one year later Expected, two year later Expected, three year later Long term rates according to the pure Expect
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