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.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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**Excel Online Structured Activity: Expectations Theory**

Interest rates on 4-year Treasury securities are currently 6.5%, while 6-year Treasury securities yield 7.7%. 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.

<img src="excel_icon.png" alt="Excel Icon"> **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 to two decimal places.

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Transcribed Image Text:**Excel Online Structured Activity: Expectations Theory** Interest rates on 4-year Treasury securities are currently 6.5%, while 6-year Treasury securities yield 7.7%. 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. <img src="excel_icon.png" alt="Excel Icon"> **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 to two decimal places. [Input Box] %
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