The yield on Treasury bills with different maturity period is as follows: Bond 1-year Treasury bond 2-year Treasury bond 3-year Treasury bond Yield 1.70% 2.05% 3.60% If the pure expectation theory holds true, what is the yield on 2-year Treasury bond one year from now? Calculate the yield on 2-year Treasury bond one year from now. O The yield on 2-year Treasury bond one year from now is 4.56%. O The yield on 2-year Treasury bond one year from now is 2.40%. The yield on 2-year Treasury bond one year from now is 4.77%. The yield on 2-year Treasury bond one year from now is 2.05%.

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
Section: Chapter Questions
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The yield on Treasury bills with different
maturity period is as follows:
Bond
1-year Treasury bond
2-year Treasury bond
3-year Treasury bond
Yield
1.70%
2.05%
3.60%
If the pure expectation theory holds true, what
is the yield on 2-year Treasury bond one year
from now?
Calculate the yield on 2-year Treasury bond
one year from now.
O The yield on 2-year Treasury bond one year from now is 4.56%.
O The yield on 2-year Treasury bond one year from now is 2.40%.
The yield on 2-year Treasury bond one year from now is 4.77%.
The yield on 2-year Treasury bond one year from now is 2.05%.
Transcribed Image Text:The yield on Treasury bills with different maturity period is as follows: Bond 1-year Treasury bond 2-year Treasury bond 3-year Treasury bond Yield 1.70% 2.05% 3.60% If the pure expectation theory holds true, what is the yield on 2-year Treasury bond one year from now? Calculate the yield on 2-year Treasury bond one year from now. O The yield on 2-year Treasury bond one year from now is 4.56%. O The yield on 2-year Treasury bond one year from now is 2.40%. The yield on 2-year Treasury bond one year from now is 4.77%. The yield on 2-year Treasury bond one year from now is 2.05%.
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