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Interest rates on 4-year Treasury securities are currently 6.7%,
while 6-year Treasury securities yield 7.25%. 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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ISBN: 9781337902571
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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