Unbiased expectations theory of the term structure


Problem: Suppose we look in the newspaper and find the following rates: the rate on 1-year securities is 4.65%, on a similar 2-year security 6.24%, and a 3-year security 6.67%. If the unbiased expectations theory of the term structure of interest rates holds, what is the one-year interest rate expected one year from now?

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Finance Basics: Unbiased expectations theory of the term structure
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