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What is the yield on this $5-$year corporate bond? Round your answer to two decimal places.

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Expectations Theory

$4-$yr$.$ Treasury security yield $5\mathrm{.}60\%$

$6-$yr$.$ Treasury security yield $7\mathrm{.}80\%$

Algebraic solution: Formulas

Total return earned on $6-$year securities #N$/$A

Total return earned on $4-$year securities #N$/$A

Yield on $2-$yr$.$ securities$,4$ years from now #N$/$A

Geometric solution:

$1+$ Total return earned on $6-$year securities #N$/$A

$1+$ Total return earned on $4-$year securities #N$/$A

Yield on $2-$yr$.$ securities$,4$ years from now #N$/$A