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The yield on a one-year Treasury security is 4.0000%, and the two-year Treasury security has a 6.0000% yield. Assuming that the pure expectations theory is
The yield on a one-year Treasury security is 4.0000%, and the two-year Treasury security has a 6.0000% yield. Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) O 10.2089% O9.1639% O8.0385% O 6.8327% Recall that on a one-year Treasury security the yield is 4.0000% and 6.0000% 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 0.2%. What is the market's estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) O 8.6996% O 7.6312% O 9.6916% O 6.4865%
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