Question
Suppose the interest rate on a 1-year T-bond is 6.1 % and that on a 3 year T-bond is 7.4 %. Assuming the pure expectations
Suppose the interest rate on a 1-year T-bond is 6.1 % and that on a 3 year T-bond is 7.4 %.
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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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
3rd Edition
0073382426, 9780073382425
