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Recall that on a one-year Treasury security the yield is 5.1500% and 6.1800% on a two-year Treasury security. Suppose the one-year security does not have

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Recall that on a one-year Treasury security the yield is 5.1500% and 6.1800% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.25%. What is the market's estimate of the one-year Treasury rate one year from now? 8.5217% 5.7035% 6.7100% 7.6494% Suppose the yield on a two-year Treasury security is 4.9%, and the yield on a five-year Treasury security is 5.1%. Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now? 4.86% 5.23% 5.86% 4.55%

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