One-year Treasury securities yield 4.25%. The market anticipates that 1 year from now, 1-year Treasury securities will
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Question:
One-year Treasury securities yield 4.25%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.75%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round intermediate calculations.
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