Question
Suppose the interest rate on a 1-year T-bond is 6 % and that on a 3 year T-bond is 7.2 %. Assuming the pure expectations
Suppose the interest rate on a 1-year T-bond is 6 % and that on a 3 year T-bond is 7.2 %.
Assuming the pure expectations theory is correct, what is the market's forecast for 2-year rates 1 year from now?
Enter your answer as a percentage and do not use the % symbol.
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Cases In Financial Reporting
Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally
8th Edition
1618531220, 9781618531223
