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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 (i.e., years 2, 3, and 4,
Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1 R1 = 6%, E1291) = 7%, 431) = 7.40%, E1491) = 7.75% Using the unbiased expectations theory, calculate the current long-term) rates for 1-, 2-, 3-, and 4-year-maturity Treasury securities. (Round your answers to 2 decimal places.) Years Current (Long- Term) Rates
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