Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over...
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Suppose that the current one-year rate (one-year spot rate) and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: |
| 1R1 = 0.3%, E(2r 1) = 1.3%, E(3r1) = 8.9%, E(4r1) = 9.25% |
Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year maturity Treasury securities. (Round your answers to 3 decimal places. (e.g., 32.161)) |
| Current (Long-Term) Rates | |
| One-year | % |
| Two-year | % |
| Three-year | % |
| Four-year | % |
| | |
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