Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the...
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Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (.e.. years 2,3, and 4, respectively) are as follows: 1R1 = 7%, E(21)=8%, E31)-8.60%, (41) = 8.95% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Round your answers to 2 decimal places.) Years Current (Long-term) Rates 1 7.00 % 2 3 4 Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (.e.. years 2,3, and 4, respectively) are as follows: 1R1 = 7%, E(21)=8%, E31)-8.60%, (41) = 8.95% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Round your answers to 2 decimal places.) Years Current (Long-term) Rates 1 7.00 % 2 3 4
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