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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 (ie., years 2. 3. and
Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (ie., years 2. 3. and 4, respectively) are as follows: 181 7%, E(21) 8%, E37) - 8.40%, E(41) = 8.75% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. Note: Round your percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34). Years Current (Long-term) Rates: 1 % 2 % 3 % 4 %
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