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Given the following term structure and assuming the unbiased expectation theory holds, answer the following question: Term Structure of Treasury Securities: Year Yield % 1

Given the following term structure and assuming the unbiased expectation theory holds, answer the following question:

Term Structure of Treasury Securities:

Year Yield %

1 4.6

2 4.9

3 5.2

4 5.4

5 5.8

a.) What is the 2-year rate 3 years from today?

b.) What is the 4-year rate 1 year from today?

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