The two-year interest rate is an average of the expected interest rate each of the two years.

Name: The two-year interest rate is an average of the expected interest rate each of the two years.
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The two-year interest rate is the annual interest rate that an investor expects to receive for holding a bond for two years. It is not an average of the expected interest rate each of the two years, but rather a single rate that reflects the overall expected return over the two-year period.

The Two-Year Interest Rate Is an Average of the Expected