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meecer
Jul 12, 2009, 09:13 PM
5 year T bond rate is 6.85%. 10 year bond is 7/35%. Maturity risk premium is zero. What would be the expected rate on a 5 year T bond purchased 4 years from today?

Professor has not actually covered this in class, and book is no help!! Have searched the internet, and still can't figure out how to do it.

Any help is appreciated!