Question: What does k3.1 = 2.5% mean for a Treasury issued asset? o The expected future one-year rate on a Treasury will be 2.5% three years

What does k3.1 = 2.5% mean for a Treasury issued asset? o The expected future one-year rate on a Treasury will be 2.5% three years from now Today's 3 year T-Note pays 2.5% for three years, if held to maturity The one-year forward rates are expected to be 2.5% for the next three years The Treasury does not guarantee a rate of return on its 3-year notes when the asset is held to maturity

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