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What is the rate of return for an investor who pays $1,049.89 for a three year bond with a 7.3% coupon paid annually and a faA one-year Treasury bill offers a 6% yield to maturity. A two-year Treasury bill offers a 6.7% yield to maturity. What is the

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ANS 1 Year rate (R.) = 6% 2 Year vate (RA] = 6.7.1. If expectation hypothesis holds then : (1 + R) x (i+ R) = (1+ Rs) (1+0.06

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