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A certificate of deposit (CD) for two years will have the same yield as a CD for one year followed by an investment in another
A certificate of deposit (CD) for two years will have the same yield as a CD for one year followed by an investment in another one-year CD after one year. True O False The yield on a one-year Treasury security is 4.9200%, and the two-year Treasury security has a 7.3800% yield. Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? O 11.2860% 8.4150% 12.573096 O 9.900090 Recall that on a one-year Treasury security the yield is 4.9200% and 7.3800% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.4500%, what is the market's estimate of the one-year Treasury rate one year from now? 0 11.405090 O 7.6330% 8.980096 0 10.237096 Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20% Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now? 6.45% 6.69% 5.46% 6.53%
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