Suppose 1-year treasury bonds yield 1 year from now is 400, Ask an Expert

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Suppose 1-year Treasury bonds yield 1 year from now is 4.00%, 1-year T-bond yield 2 years from now is 5%, and 1-year T-bond 3-year from now is 6%.

Assuming the pure expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield on 3-year T-bond today (now)?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92838298

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