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This is what it gives me for Treasury securities: Maturity Yield 1 year 6.0% 2 years 6.2% 3 years 6.4% 4 years 6.5% 5 years
This is what it gives me for Treasury securities:
Maturity Yield
1 year 6.0%
2 years 6.2%
3 years 6.4%
4 years 6.5%
5 years 6.5%
Question:
Assume that the pure expectations theory of the term structure is correct. What does the market expect will be the interest rate on 2-year securities3 years from now?
I need help learning how to solve it. I am confused as to what the equation is. Please help. Thank you.
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