Question
Problem 6-7 Unbiased Expectations Theory (LG6-5) One-year Treasury bills currently earn 1.25 percent. You expect that one year from now, 1-year Treasury bill rates will
Problem 6-7 Unbiased Expectations Theory (LG6-5)
| One-year Treasury bills currently earn 1.25 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 1.45 percent. If the unbiased expectations theory is correct, what should the current rate be on 2-year Treasury securities? (Round your answer to 2 decimal places.) |
| Current rate | % |
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Public Finance
Authors: Harvey S Rosen
7th Edition
0072876484, 978-0072876482
