Question: please include calculations! Assume the current interest rate on a one-year Treasury bond (Ra) is 1.69 percent, the current rate on a two-year Treasury bond
please include calculations!
Assume the current interest rate on a one-year Treasury bond (Ra) is 1.69 percent, the current rate on a two-year Treasury bond (R2) is 1.85 percent, and the current rate on a three-year Treasury bond (1R3) is 1.96 percent. If the unbiased expectations theory of the term structure of interest rates is correct, what is the one-year interest rate expected on T-bills during year 3 (E(3-1) or 3f)? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.9., 32.16)) Interest rate expected during year 3 %
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