Today is January 2, 2019, and investors expect the annual risk-free interest rates in 2019 through 2021

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Today is January 2, 2019, and investors expect the annual risk-free interest rates in 2019 through 2021 to be:

Year 2019 2020 2021 One-Year Rate (RF) 2.2% 1.8 2.9 

What is the yield to maturity for Treasury bonds that mature at the end of 

(a) 2020 (a two-year bond) 

(b) 2021 (a three-year bond)?

Assume the bonds have no risks.

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Related Book For  answer-question

CFIN

ISBN: 9781337407342

6th Edition

Authors: Scott Besley, Eugene Brigham

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