A recent edition of The Wall Street Journal reported interest rates of 7.6 percent, 7.95 percent,...

A recent edition of The Wall Street Journal reported interest rates of 7.6 percent, 7.95 percent, 8.25 percent, and 8.35 percent for three-year, four-year, five-year, and six-year Treasury notes, respectively. According to the unbiased expectations theory, what are the expected one-year rates for years 4, 5, and 6 (i.e., what are ₄f₁, ₅f₁, and ₆f₁)? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

	Expected One-Year Forward Rates
Year 4	%
Year 5	%
Year 6	%

Expert Solution

jeff jeffy answered 2 years ago

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