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The yield on a one-year Treasury security is 4.6900%, and the two-year Treasury security has a 6.3300% yield. Assuming that the pure expectations theory is
The yield on a one-year Treasury security is 4.6900%, and the two-year Treasury security has a 6.3300% 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? 9.1200% 6.8000% 8.0000% 10.1600% Recall that on a one-year Treasury security the yield is 4.6900% and 6.3300% 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 0.4500%. What is the market's estimate of the one-year Treasury rate one year from now? 9.0040% 7.0900% 6.0270% 8.0830% 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? 6.69% 6.45% 6.61% 5.46%
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