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The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 285 percent and the rate on 20-year Treasury bonds is 5.10
The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 285 percent and the rate on 20-year Treasury bonds is 5.10 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a 10 -year Treasury bond purchased ten years from today, E(10r10). (Do not round intermediate calculations and round your answer to 2 decimal places.) The Wall Street Journal reports that the rate on 7-year Treasury securities is 1.70 percent and the rate on 9-year Treasury securities is 2.65 percent. According to the unbiased expectations theory, what does the market expect the 2-year Treasury rate to be seven years from today, E(7r2) ? (Do not round intermediate calculations and round your answer to 2 decimal places.)
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