Question: Suppose that the current yield on a two year Treasury note is 1.20 percent and the yield on a three year note is 1.44 percent.

Suppose that the current yield on a two year Treasury note is 1.20 percent and the yield on a three year note is 1.44 percent. What is the implicit one year forward rate for two years ahead? Why is it higher than 1.44 percent? Would you please perform this calculation on excel?

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