Observing the following term structure; a US treasury bond maturing in 1 year has a yield of 3% while US Treasury bond maturing in 2 years has a yield of 7%; what is the expected 1 year rate,1 year from now?
A) 10.16%
B) 11.00%
C) 11.16%
D) 11.23%
Correct Answer:
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