Question: Term Structure A 1-year Treasury bill currently offers a 4% rate of return. A 2-year Treasury note offers a 4.5% rate of return. Under the

Term Structure A 1-year Treasury bill currently offers a 4% rate

Term Structure A 1-year Treasury bill currently offers a 4% rate of return. A 2-year Treasury note offers a 4.5% rate of return. Under the expectations theory, what rate of return do investors expect a 1-year Treasury bill to pay next year? The rate of return investors expect a 1-year Treasury bill to pay next year is %. (Round to two decimal places.)

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