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

Unbiased Expectations Theory 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=4.70%, E(2r1) =5.70%, E(3r1) =6.20%, E(4r1)=6.55% Using the unbiased expectations theory, what is the current (long-term) rate for four-year-maturity Treasury securities?

Multiple Choice

6.5500%

5.7852%

5.7875%

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