Question

How would I put this in a financial calculator? EXPECTATIONS THEORY Interest rates on 4-year Treasury...

How would I put this in a financial calculator?

EXPECTATIONS THEORY

Interest rates on 4-year Treasury securities are currently 6.8%, while 6-year Treasury securities yield 7.95%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

EXPECTATIONS THEORY

One-year Treasury securities yield 2.3%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.9%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Interest rates on 4-year Treasury securities are currently 6.8%, while 6-year Treasury securities yield 7.95%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now?
=(1.0795^6/1.068^4)^(1/2)-1=10.287%


One-year Treasury securities yield 2.3%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.9%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities?
=(1.023*1.069)^(1/2)-1=4.575%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
EXPECTATIONS THEORY Interest rates on 4-year Treasury securities are currently 6.2%, while 6-year Treasury securities yield...
EXPECTATIONS THEORY Interest rates on 4-year Treasury securities are currently 6.2%, while 6-year Treasury securities yield 7.65%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places. %
1. Interest rates on 4-year Treasury securities are currently 5.7%, while 6-year Treasury securities yield 7.3%....
1. Interest rates on 4-year Treasury securities are currently 5.7%, while 6-year Treasury securities yield 7.3%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.​
Interest rates on 4-year Treasury securities are currently 6.9%, while 6-year Treasury securities yield 7.8%. The...
Interest rates on 4-year Treasury securities are currently 6.9%, while 6-year Treasury securities yield 7.8%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer...
Problem 6-8 Expectations Theory Interest rates on 4-year Treasury securities are currently 6.15%, while 6-year Treasury...
Problem 6-8 Expectations Theory Interest rates on 4-year Treasury securities are currently 6.15%, while 6-year Treasury securities yield 7.85%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Round your answer to two decimal places.
Interest rates on 4-year Treasury securities are currently 6.4%, while 6-year Treasury securities yield 7.4%. The...
Interest rates on 4-year Treasury securities are currently 6.4%, while 6-year Treasury securities yield 7.4%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Expectations Theory 4-yr. Treasury security yield 6.40% 6-yr. Treasury security yield 7.40% Algebraic solution: Total return earned on 6-year securities Total return earned on 4-year securities Yield on 2-yr. securities, 4 years from now Geometric solution: 1 + Total return...
EXPECTATIONS THEORY One-year Treasury securities yield 3.65%. The market anticipates that 1 year from now, 1-year...
EXPECTATIONS THEORY One-year Treasury securities yield 3.65%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.55%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places. ___% EXPECTED INTEREST RATE The real risk-free rate is 2.45%. Inflation is expected to be 3.25% this year, 3.6% next year, and 2.2%...
Question 1.) One-year Treasury securities yield 4.55%. The market anticipates that 1 year from now, 1-year...
Question 1.) One-year Treasury securities yield 4.55%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.7%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places. Question 2.) A Treasury bond that matures in 10 years has a yield of 5.25%. A 10-year corporate bond has a yield of...
Interest rates on 3 year treasury securities are currently 5%, while 5 year treasury securities yield...
Interest rates on 3 year treasury securities are currently 5%, while 5 year treasury securities yield 8%. If the pure expectations theory is correct what does the market believe that 2 year securities will be yielding 3 years from now?  Answer to the nearest hundredth of a percent as in xx.xx% and enter without the percent sign.
Interest rates on 3-year Treasury securities are currently 1.92%, while 10-year Treasury securities yield 5.62%. If...
Interest rates on 3-year Treasury securities are currently 1.92%, while 10-year Treasury securities yield 5.62%. If the pure expectations theory is correct, what does the market believe that 7-year Treasury securities will be yielding 3 years from now? a. 4.03 percent b. 3.70 percent c. 7.21 percent d. 6.04 percent e. 7.58 percent
One year treasury securities yield 2% the market anticipates that one year from now when year...
One year treasury securities yield 2% the market anticipates that one year from now when year treasury securities will yield 5.85% if the pure expect Tatian's theory is correct what is the deal today for two year treasury securities Kathy do you like the yield using a geometric Average
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT