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Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 4 yr 5 yr 10 yr 20 yr 30 yr 03/15 0.02

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Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 4 yr 5 yr 10 yr 20 yr 30 yr 03/15 0.02 0.03 0.11 0.24 0.66 0.93 1.17 1.41 1.71 1.92 2.51 Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 4yr 5yr 10 yr 20 yr 30 yr 03/16 0.29 0.33 0.50 0.68 0.85 0.98 1.19 1.31 1.83 2.28 2.70 Above is data for US Treasury yields on March 2, 2015 and March 2, 2016. On March 2, 2015, assuming the pure expectations theory is correct: what was the expected interest rate on a 1-year bond one year later? How does this compare with the actual interest rate on a 1-year bond one year later? How would you explain the difference if any

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