Interest rates on 4-year treasury securities are currently 5.6%, while 6-year Treasury securities yield 7.5%. If the
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Question:
Interest rates on 4-year treasury securities are currently 5.6%, while 6-year Treasury securities yield 7.5%. 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 avg. Do not round intermediate calculations. Round answer to two decimal places.
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