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Chapter 17, Problem 17.3.6PA
To determine

The method of future inflation expectations of the households.

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Economics A recent edition of The Wall Street Journal reported interest rates of 6 percent, 6.35 percent, 6.65 percent, and 6.75 percent for three- year, four- year, five- year, and six-year Treasury notes, respectively. According to the unbiased expectations theory, what are the expected one- year rates for years 4, 5, and 6 (i. e., what are 4f1, 5f1, and 6f1)?
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