uppose we observe the three-year Treasury security rate (1R3) to be 4.9 percent, the expected...
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uppose we observe the three-year Treasury security rate (1R3) to be 4.9 percent, the expected one-year rate next year (2r1) to be 4 percent, and the expected one-year rate the following year-E(3rr1) to be 6.4 percent. If the unbiased expectations theory of the erm structure of interest rates holds, what is the one-year Treasury security rate? (Do not round intermediate colculations. Round jour percentage answer to 2 decimal places. (e.9., 32.16))
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