Question: Suppose the the current one year rete (one year spot rate) and expected one year T-bill rates over the following three years te, years 2.3,

 Suppose the the current one year rete (one year spot rate)

Suppose the the current one year rete (one year spot rate) and expected one year T-bill rates over the following three years te, years 2.3, and 4, respectively are as follows: R = 5 percent. E=6 percent. E= 75 percent E4685 percent Using the unbiased expectations theory, calculate the current fong term rates for one two three and four year-maturity Treasury securities O 5.00 percent 5.50 percent 610 percent 6 23 percent 0 5.00 percent 5.50 percent. 6.16 percent 6 33 percent 500 percent 5.25 percent 616 percent. 649 percent O 500 percent. 5.25 percent 610 percent 6 27 percent

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