Question
Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 4.80%. Assume that the pure expectations theory is
Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 4.80%. Assume that the pure expectations theory is valid. What is the yield on a 1-year T-bond expected to be one year from now?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
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