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You observe the following yields on Treasury securities of various maturities: Maturity Yield 1 year 6.0% 3 years 6.4 6 years 6.5 9 years 6.8
You observe the following yields on Treasury securities of various maturities: Maturity Yield 1 year 6.0% 3 years 6.4 6 years 6.5 9 years 6.8 12 years 7.0 15 years 7.2 Assume the expectations theory is correct. What does the market expect the interest rate on 9-year securities to be six years from now?
A. 6.80% B. 8.00% C. 6.65% D. 6.50% E. 7.67%
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