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The interest rate on one-year Treasury bonds is 0.0 percent, the rate on two-year T-bonds is 0.3 percent, and the rate on three-year T-bonds is
The interest rate on one-year Treasury bonds is 0.0 percent, the rate on two-year T-bonds is 0.3 percent, and the rate on three-year T-bonds is 0.6 pertere. a. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Hound your answer to one decimal piacie. 96 b. Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to che decimai piace. 96
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