Question
Interest rates on 4-year Treasury securities are currently 5.1%, while 6-year Treasury securities yield 7.65%. If the pure expectations theory is correct, what does the
Interest rates on 4-year Treasury securities are currently 5.1%, while 6-year Treasury securities yield 7.65%. 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 geometric average. Do not round intermediate calculations. Round your answer to two decimal places.
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Financial Risk Manager Handbook
Authors: Philippe Jorion, Global Association Of Risk Professionals
5th Edition
0470479612, 978-0470479612
