The yield on a one-year Treasury security is 4.4600%, and the two-year Treasury security has...
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The yield on a one-year Treasury security is 4.4600%, and the two-year Treasury security has a 6.6900% yield. Assuming that the pure expectations theory is correct, what is the markets estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.)
7.6225%
10.2231%
8.9676%
11.3889%
Recall that on a one-year Treasury security the yield is 4.4600% and 6.6900% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.3%. What is the markets estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.)
10.6116%
9.5254%
8.3556%
7.1023%
Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the markets estimate of the three-year Treasury rate two years from now? (Note: Do not round your intermediate calculations.)
6.45%
5.46%
7.10%
6.69%
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