Suppose we observe the 3-year Treasury security rate (1R3) to be8 percent, the expected 1-year rate next year??E(2r1)??to be 5percent, and the expected 1-year rate

Suppose we observe the 3-year Treasury security rate (1R3) to be8 percent, the expected 1-year rate next yearâ??E(2r1)â??to be 5percent, and the expected 1-year rate the following yearâ??E(3r1)â??to 2 answers