#3

Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (.e. years 2, 3, and 4, respectively) are as follows: 1R1 = 5%, 8(271) -6%, E3-) = 6.60%, (4-1) = 6.95% Using the unbiased expectations theory, calculate the current (long-term) rates for one, two, three-, and four-year-maturity Treasury securities. (Round your answers to 2 decimal places.) Years Current (Long-term) Rates 1 2 3 4