Expectations theoryinterest rates on 4-year treasury, Ask an Expert

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Expectations Theory

Interest rates on 4-year Treasury securities are currently 5.85%, while 6-year Treasury securities yield 7.65%. 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. %

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Financial Management, Finance

Category:- Financial Management
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