Question

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

Answer 1

Explanation:

explain properly dear

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