Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4 respectively) are as follows: 1R1 = 5 percent, E(21) 6 percent, E(31) 7.5 percent E(41) = 7.85 percent E = Using the unbiased expectations theory, calculate the current (long-term) rates for three-year- and four-year- maturity Treasury securities. O one-year: 6.16 percent, two-year: 6.78 percent O one-year: 6.16 percent, two-year: 6.58 percent O one-year: 5.95 percent, two-year: 6.45 percent O one-year: 6.25 percent, two-year: 6.45 percent

Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2,3 , and 4 respectively) are as follows: 1R1=5percent,E(2r1)=6percent,E(3I1)=7.5percentE(4r1)=7.85percent Using the unbiased expectations theory, calculate the current (long-term) rates for three-year-and four-yearmaturity Treasury securities. one-year: 6.16 percent, two-year: 6.78 percent one-year: 6.16 percent, two-year: 6.58 percent one-year: 5.95 percent, two-year: 6.45 percent one-year: 6.25 percent, two-year: 6.45 percent