Question: Suppose that the current three-year rate on a treasury security is .50 percent and the market expects the two year rate, one year from now

Suppose that the current three-year rate on a treasury security is

Suppose that the current three-year rate on a treasury security is .50 percent and the market expects the two year rate, one year from now to be .65%. Based on the pure expectations hypothesis, what should be the one year rate today? 20% .95% 0.73% 0.43% O None of the above

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