Today interest rates on 1-year t-bonds yield 16 interest, Ask an Expert

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Today, interest rates on 1-year T-bonds yield 1.6%, interest rates on 2-year T-bonds yield 2.45%, and interest rates on 3-year T-bonds yield 3.5%.

a. If the pure expectations theory is correct, what is the yield on 1-year T-bonds one year from now? Be sure to use a geometric average in your calculations. Round your answer to four decimal places. Do not round intermediate calculations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91535909

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