Question
Interest rates on 4-year Treasury securities are currently 6.0%, while 6-year Treasury securities yield 7.25%. If the pure expectations theory is correct, what does the
Interest rates on 4-year Treasury securities are currently 6.0%, while 6-year Treasury securities yield 7.25%. 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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Foundations Of Financial Markets And Institutions
Authors: Franco Modigliani, Frank J. Jones, Michael G. Ferri, Frank J. Fabozzi
3rd Edition
0130180793, 978-0130180797
