What is the markets forecast for three-year rate three years
Problem
Suppose the interest rate on a 3-year government bond is 4.50% and that on a 6-year government bond is 5.90%. What is the market's forecast for 3-year rates 3 years from now, assuming the pure expectations theory is correct?
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What is the market's forecast for 3-year rates 3 years from now, assuming the pure expectations theory is correct?
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