Revie File Formulas Data Home Insert Draw Page Layout & Co Av B Arial v B D 6.75% 7.30% Formulas #N/A #N/A #N/A #N/A #N/A #N/A B7 fx A Expectations Theory 2 3 4-yr. Treasury security yield 4 6-yr. Treasury security yield 5 6 Algebraic solution: 7 Total return eamed on 6-year securities Total return eamed on 4-year securities 9 Yield on 2-yr. securities, 4 years from now 10 11 Geometric solution: 12 1 + Total retum earned on 6-year securities 13 1 + Total return earned on 4-year securities 14 Yield on 2-yr. securities, 4 years from now 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Excel Online Structured Activity: Expectations Theory Interest rates on 4-year Treasury securities are currently 6.75%, while 6-year Treasury securities yield 7.3%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places