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FinanceQ&A LibraryOne-year Treasury securities yield 4.85%. The market anticipatesthat 1 year from now, 1-year Treasury securities will yield 5.2%. If the pure expectationstheory is correct, what is the yield today for 2-year Treasury securities? Calculate the yieldusing a geometric average.Start your trial now! First week only $4.99!*arrow_forward*

Question

One-year Treasury securities yield 4.85%. The market anticipates

that 1 year from now, 1-year Treasury securities will yield 5.2%. If the pure expectations

theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield

using a geometric average.

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