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You can observe the following Treasury yields: Maturity Yield 1 year 2.8% 2 years 3.2 3 years 3.7 4 years 4.5 5 years 4.6 6
You can observe the following Treasury yields:
Maturity | Yield |
1 year | 2.8% |
2 years | 3.2 |
3 years | 3.7 |
4 years | 4.5 |
5 years | 4.6 |
6 years | 5.0 |
If the pure expectations theory holds, what does the market expect will be the interest rate on two-year securities, four years from now?
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