Question: Recall that on a one - year Treasury security the yield is 5 . 3 8 0 0 % and 6 . 4 5 6
Recall that on a oneyear Treasury security the yield is and on a twoyear Treasury security. Suppose the oneyear security does not have a maturity risk premium, but the twoyear security does and it is What is the market's estimate of the oneyear Treasury rate one year from now? Note: Do not round your intermediate calculations.
Suppose the yield on a twoyear Treasury security is and the yield on a fiveyear Treasury security is Assuming that the pure expectations theory is correct, what is the market's estimate of the threeyear Treasury rate two years from now? Note: Do not round your intermediate calculations.
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