Question $1$

$56\mathrm{.}25$ pts

One$-$year Treasury bills currently earn $6\mathrm{.}25$ percent. You expect that one year from now, one$-$year Treasury bill rates will increase to $6\mathrm{.}50$ percent. If the unbiased expectations theory is correct, what should the current rate be on two$-$year Treasury securities$?$

$6\mathrm{.}375\%$

$12\mathrm{.}750\%$

$6\mathrm{.}500\%$

$6\mathrm{.}250\%$

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