with no Inflation and Interest Rates: A Closer Look" on page 211.) EXPECTATIONS THEORY One-year Treasury securities yield 4.85%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.2%. If the pure expectations 6-7 Chapter 6 Interest Rates theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. 70/ 11-7 Why might it be rational for a small firm that does not have access to the capital markets to use the payback method rather than the NPV method? 11-8 Proiect