Interest rates on 4-year Treasury securities are currently 5.65%, while 6-year Treasury securities yield 7.95%. The data has been collected inthe Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.Open spreadsheetIf the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate theyield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.%

Answered: Interest rates on 4-year Treasury…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 2E

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