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The yield on a one-year Treasury security is 5.6100%, and the two-year Treasury security has a 7.5735% yield. Assuming that the pure expectations theory is
The yield on a one-year Treasury security is 5.6100%, and the two-year Treasury security has a 7.5735% 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.) 8.1375% 9.5735% 12.1583% 10.9138% Recall that on a one-year Treasury security the yield is 5.6100% and 7.5735% 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 0.45%. What is the market's estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 10.9964% 7.3598% 8.6586% 9.8708% 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% 5.46% 6.69% 6.53%
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