Question: 270 d. e. 1% - x 11) Suppose the interest rate ona 1-year T-bond is 5.0 % and that on a 2-year T-bill is 6.0%.

270 d. e. 1% - x 11) Suppose the interest rate ona 1-year T-bond is 5.0 % and that on a 2-year T-bill is 6.0%. Assuming the pure expectations theory is correct, what is the market's forecast 1.b5 5.07 for 1-year rates 1 year from now? 2 X a. 7.01% b. 6.92% c. 6.83% d. 6.74% e. 6.65% o.0r 1) A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following / statements is CORRECT

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