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Please show steps for both Wall Street Journal and see the You look at interest rates on 30-year Treasury and corporate bonds with different ratings
Please show steps for both
Wall Street Journal and see the You look at interest rates on 30-year Treasury and corporate bonds with different ratings in the following rates for noncallable bonds: T-bond = 4.65% A = 6.74% AAA = 5.59% BBB = 7.88% In one sentence, the differences in rates among these issues were most probably caused primarily by Suppose 1-year Treasury bonds yield 5.00% (when you invest for one year, this is the interest rate you would earn), while 2-year T-bonds yield 6.10% (when you invest for two years, this is the rate you would earn every year, no money you can withdraw until the end of year two). Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on a 1-year T-bond expected to be one year from now
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