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The yield on a one-year Treasury security is 5.8400%, and the two-year Treasury security has a 7.0100% yield. Assuming that the pure expectations theory is
The yield on a one-year Treasury security is 5.8400%, and the two-year Treasury security has a 7.0100% 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? 9.3366% 10.4013% 8.1900% 6.9615% Recall that on a one-year Treasury security the yield is 5.8400% and 7.0100% 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 0.2500%. What is the market's estimate of the one-year Treasury rate one year from now? 6.5370% 9.7660% 8.7670% 7.6900% 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? 7.10% 6.53% 6.45% 6.69%
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