Suppose that the interest rate on a one-year Treasury bill is currently 3% and that investors...
Term Structure A 1-year Treasury bill currently offers a 4% rate of return. A 2-year Treasury note offers a 4.5% rate of return. Under the expectations theory, what rate of return do investors expect a 1-year Treasury bill to pay next year? The rate of return investors expect a 1-year Treasury bill to pay next year is _______ %. (Round to two decimal places.)
One-year T-bills currently earn 0.38 percent. You expect that one year from now, one-year T-bill rates will increase to 0.44 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Current rate on two-year Treasury securities %
One-year T-bills currently earn 0.36 percent. You expect that one year from now, one-year T-bill rates will increase to 0.41 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Current rate on two-year Treasury securities
Assume the current interest rate on a one-year Treasury bond ( ) is 1.10 percent, the current rate on a two-year Treasury bond (R2) is 1.26 percent, and the current rate on a three-year Treasury bond (1R3) is 1.37 percent. If the unbiased expectations theory of the term structure of interest rates is correct, what is the one-year interest rate expected on T-bills during year 3 (E3or 3)? (Do not round intermediate calculations. Round your answer to 2 decimal places....
Unbiased Expectations Theory One-year Treasury bills currently earn 5.35 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.50 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities? 5.5000% 5.4250% 10.8500% 5.3500%
One-year Treasury bills currently earn 3.75 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.95 percent. The liquidity premium on 2-year securities is 0.08 percent. If the liquidity theory is correct, what should the current rate be on 2-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current Rate=
One-year Treasury bills currently earn 2.80 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.00 percent and that two years from now, 1-year Treasury bill rates will increase to 3.50 percent. The liquidity premium on 2-year securities is 0.10 percent and on 3-year securities is 0.20 percent. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to...
One-year Treasury bills currently earn 3.25 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.45 percent and that two years from now, 1-year Treasury bill rates will increase to 3.95 percent. The liquidity premium on 2-year securities is 0.10 percent and on 3-year securities is 0.20 percent. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to...
One-year Treasury bills currently earn 2.85 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.05 percent and that two years from now, 1-year Treasury bill rates will increase to 3.55 percent. The liquidity premium on 2-year securities is 0.10 percent and on 3-year securities is 0.20 percent. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to...
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: IRI . 0.58, E(2r 1) . 1.51, E(3r1)-9.9%, E(4r1 ) . 10.25% Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Round your answers to 3 decimal places. (e.g., 32.161) Current (Long-Term) Rates One-year Two-year Three-year Four-year