The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates, Based on the pure expectations theory, is the following statement true or false? A certificate of deposit (CD) for two years will have the same yield as a CD for one year followed by an investment in another one-year CD after one year. True O False The yield on a one-year Treasury security l 4.0000%, and the two-year Treasury security has a 4.1000% yield. Assuming that the pure expectations theory is correct, what is the market's estimate or the one-year Treasury rate one year from now? 07:12479 4.7685 5.61001 06.39 Recall that on a one year Treasury security the yield is 4.0000 and 45000% on a two-year Treasury security Support the one-year storty does not have a maturity risk premium, but the two-year security does and 0.4000 What is the market's estimate of the one year Treasury rate one year from now? 5.69205 0950 4.5000 04.0000 The yield on a one-year Treasury security is 4.0000%, and the two-year Treasury security has a 4.8000% yie Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasur one year from now? 7.1247% 0 4.7685% O 5.6100% O 6.3954% 3 Recall that on a one-year Treasury security the yield is 4.0000% and 4.8000% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.4000%. What is the market's estimate of the one-year Treasury rate one year from now? 5.4720% 6.0960% 4.8000% 4.0B00% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20% Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now? 6.61% 1.53