The yield on a one-year Treasury security is 4.2300%, and the two-year Treasury security has a 5.7105% yield. Assuming that the pure expectations theory is correct, what is the markets estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.)

9.1592%

6.1302%

8.2217%

7.212%

Recall that on a one-year Treasury security the yield is 4.2300% and 5.7105% 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 0.5%. What is the markets estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.)

7.0682%

5.2702%

6.2002%

7.8743%

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 markets estimate of the three-year Treasury rate two years from now? (Note: Do not round your intermediate calculations.)

7.10%

6.53%

6.45%

6.61%