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Using expectations theory: You observe that there is a one-year Treasury bond with a yield of 3.0%. You also assume that rates will increase and
Using expectations theory: You observe that there is a one-year Treasury bond with a yield of 3.0%. You also assume that rates will increase and that the one-year bond will increase by 1.0% each year. For example, you expect the one-year bond in year 2 will be 4.0% and 5.0% in year 3 . With that information, what do you expect the 3 -year interest rate to be in % terms
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