Unbiased Expectations Theory Suppose that the current one-year rate (oneyear spot rate) and expected one-year T-bill...

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Unbiased Expectations Theory Suppose that the current one-yearrate (oneyear spot rate) and expected one-year T-bill rates overthe following three years (i.e.,
years 2, 3, and 4, respectively) are as follows:
1R1=7%, E(2r1) =9%, E(3r1) =6.0% E(4r1)=4%
Using the unbiased expectations theory, calculate the current(long-term) rates for
one-, two-, three-, and four-year-maturity Treasury securities.Show your answers in
percentage form to 3 decimal places.
Note that:
Rate for a two year security
= [(1 + 1R1)(1 + E(2r1))] 1/2 - 1
Rate for a three year security
= [(1 + 1R1)(1 + E(2r1))(1 + E(3r1))] 1/3 - 1
Rate for a four year security
= [(1 + 1R1)(1 + E(2r1))(1 + E(3r1))(1 + E(4r1))] 1/4 - 1

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Unbiased Expectations Theory Suppose that the current one-yearrate (oneyear spot rate) and expected one-year T-bill rates overthe following three years (i.e.,years 2, 3, and 4, respectively) are as follows:1R1=7%, E(2r1) =9%, E(3r1) =6.0% E(4r1)=4%Using the unbiased expectations theory, calculate the current(long-term) rates forone-, two-, three-, and four-year-maturity Treasury securities.Show your answers inpercentage form to 3 decimal places.Note that:Rate for a two year security= [(1 + 1R1)(1 + E(2r1))] 1/2 - 1Rate for a three year security= [(1 + 1R1)(1 + E(2r1))(1 + E(3r1))] 1/3 - 1Rate for a four year security= [(1 + 1R1)(1 + E(2r1))(1 + E(3r1))(1 + E(4r1))] 1/4 - 1