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The yield on a one-year Treasury security is 5.3800%, and the two-year Treasury security has a 6.4560% yield. Assuming that the pure expectations theory is
The yield on a one-year Treasury security is 5.3800%, and the two-year Treasury security has a 6.4560% 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.) 7.543% 8.599% 6.4116% 9.5796% Recall that on a one-year Treasury security the yield is 5.3800% and 6.4560% 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 0.25%. What is the market's estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 5.9826% 7.0384% 8.9388% 8.0238% 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? (Note: Do not round your intermediate calculations.) 6.45% 6.53% 6.69% 5.46%
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