Question
Suppose the interest rate on a 1-year T-bond is 5.76% and that on a 2-year T-bond is 5.50%. Assuming the pure expectations theory is correct,
Suppose the interest rate on a 1-year T-bond is 5.76% and that on a 2-year T-bond is 5.50%. Assuming the pure expectations theory is correct, what is the market's forecast for one-year spot rates one year from now?
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The Structural Foundations Of Monetary Policy
Authors: Michael D. Bordo, John H. Cochrane, Amit Seru
1st Edition
0817921346, 978-0817921347
