Assume that the term structure of Treasury securities includes the following rates:

Using this information calculate:

(a) the 6-month annualized yield expected in the second half of the current year, and

(b) the 1-year yield expected for year 3

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Security 3-month bill 6-month bill 1-year note 2-year note 3-year note Annual Yield (in %) 4.50 4.57 4.52 4.51 4.48