Post:$$ Answer each of the following questions.$$

$1$ Assume that today, one$-$year Treasury bills yield $6\mathrm{.}5$ percent and $2-$year Treasury securities yield $5\mathrm{.}9$ percent. Assume that the expectations theory holds. What is your prediction of the one$-$year rate on Treasury bills one year from today?

$2$ Now assume that the $3-$year Treasury rate is $6\mathrm{.}8$ percent and the $7-$year Treasury rate is $8\mathrm{.}5$ percent.$$ If the Pure Expectations Hypothesis is true, what is your prediction of the $4-$year Treasury rate, $3$ years from now?

$3$ True or False:$$ The yield on a $4-$year Treasury bond will always exceed the yield on a $2-$year Treasury bond. Explain your answer.

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