Excel Online Structured Activity: Expectations Theory Interest rates on 4-year Treasury securities are currently 5.6%, while 6-year Treasury securities yield 7.75%. The data has been collected in the Microsoft Excel below. Open the spreadsheet and perform the required analysis to answer the question below. X HHHI Open spreadsheet If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geome average. Do not round your intermediate calculations. Round your answer to two decimal places. % Check My Work Reset Problem B C D E I 5.60% 7.75% A 1 Expectations Theory 2 3 4-yr. Treasury security yield 4 6-yr. Treasury security yield 5 6 Algebraic solution: 7 Total return earned on 6-year securities 8 Total retum earned on 4-year securities 9 Yield on 2-yr. securities, 4 years from now 10 11 Geometric solution: 12 1 + Total return earned on 6-year securities 13 1 + Total return earned on 4-year securities 14 Yield on 2-yr. securities, 4 years from now 15 16 17 18 Formulas #N/A #N/A #N/A #N/A #N/A #N/A 1