Suppose that the current five-year rate on a treasury security is 4.55 percent and the market expects the three year rate, two years from now to be 3.45%. Based on the pure expectations hypothesis, what should be the two year rate today?
a |
5.29% |
|
b |
6.22% |
|
c |
4.18% |
|
d |
6.71% |
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
Get Answers For Free
Most questions answered within 1 hours.