Assume the current interest rate on a 1-year treasury bond, Ask an Expert

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Assume the current interest rate on a 1-year Treasury bond (1R1) is 6.50 percent, the current rate on a 2 year treasury bond (1R2) is 7.25 percent and the current rate on a 3 year treasury bond (1R3) is 8.50 percent. If the biased expectations theory of the term structure of interest rates is correct, what is the 1 year foward rate expected on treasury bills during year 3, 3f1?

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Financial Management, Finance

Category:- Financial Management
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