Question: 1 year Treasury rates are 1%, while 2 year Treasury rates are 7%. What is the expected 1 year Treasury rate one year from today?

  1. 1 year Treasury rates are 1%, while 2 year Treasury rates are 7%. What is the expected 1 year Treasury rate one year from today?
  2. Given the Treasury rates shown below, what is the expected 2 year Treasury rate one year from today?

Term Yield

year 1 - 1%

year 2 - 6%

year 3 - 6%

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