Suppose that the interest rate on a one-year Treasury bill is currently 1% and that investors expect
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Suppose that the interest rate on a one-year Treasury bill is currently 1% and that investors expect that the interest rates on one-year Treasury bills over the next three years will be 2%, 3%, and 2%. Use the expectations theory to calculate the current interest rates on two-year, three-year, and four-year Treasury notes.
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Related Book For
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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