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Assuming that the pure expectation theory holds, use the following yields to calculate the future rates for 4-year rate in 3 years time (3f) and

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Assuming that the pure expectation theory holds, use the following yields to calculate the future rates for 4-year rate in 3 years time (3f) and 1-year rate in 4 years time (4fs). (4 marks) Year 1 2 3 4 5 6 7 Rate 4.20% 4.25% 4.28% 5.10% 5.15% 4.85% 4.80%

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