Question: The current yield on a 1 year treasury bond is 1.02% and the current yield on a 3 year treasury bond is 1.61%. What is

The current yield on a 1 year treasury bond is 1.02% and the current yield on a 3 year treasury bond is 1.61%. What is the expected semi-annual yield on a 2 year treasury bond, 1 year from today (forward rate)? Use $1,000 as your investment (PV).

HINT: The rates given in this problem are annual. However, the solution (f variable) to the forward rate formula is a semi-annual rate. Use this semi-annual rate when choosing your answer. Do not convert the rate to annual.

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