Question

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 ______.__%**

Step 1

Calculate the current rate on 3-year t...

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