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The term structure of interest rates is as follows: 1-year rate = 3.9% 2-year rate = 4.4% 3-year rate = 5.0% What does the market
The term structure of interest rates is as follows:
- 1-year rate = 3.9%
- 2-year rate = 4.4%
- 3-year rate = 5.0%
What does the market expect the two-year rate to be one year from today? Write your answer out to five decimals - for example, write 3.878% as .03878.
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