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When answering can you please fill out the blue, green and orange box thank you Interest rates on 4-year Treasury securities are currently 5.5%, while

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When answering can you please fill out the blue, green and orange box thank you

Interest rates on 4-year Treasury securities are currently 5.5%, while 6-year Treasury securities yield 7.7%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places. % 5.50% 7.70% 1 Expectations Theory 2 3 4-yr. Treasury security yield 4 6-yr. Treasury security yield 5 6 Algebraic solution: 7 Total return earned on 6-year securities 8 Total return earned on 4-year securities 9 Yield on 2-yr. securities, 4 years from now 10 11 Geometric solution: 12 1 + Total return earned on 6-year securities 13 1 + Total return earned on 4-year securities 14 Yield on 2-yr. securities, 4 years from now Formulas #N/A #N/A #N/A #N/A #N/A #N/A 15

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