One-year Treasury bills currently earn 2.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.40 percent and that two years from now, 1-year Treasury bill rates will increase to 3.80 percent. If the unbiased expectations theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current Rate ______.__%
One-year Treasury bills currently earn 2.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.40 percent and that two years from now, 1-year Treasury bill rates will increase to 3.80 percent. If the unbiased expectations theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current Rate ______.__%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 10P
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One-year Treasury bills currently earn 2.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.40 percent and that two years from now, 1-year Treasury bill rates will increase to 3.80 percent. If the unbiased expectations theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Current Rate ______.__%
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