Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market rates for different
Fantastic news! We've Found the answer you've been seeking!
Question:
Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market rates for different maturities are as follows:
1 year = 3.8%
2 years = 4.6%
3 years = 5.3%
4 years = 6.6%
5 years = 8%
What is the implied 1 year interest rate for investing in 4 years?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date: