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1 year Treasury rates are 1%, while 2 year Treasury rates are 7%. What is the...

1 year Treasury rates are 1%, while 2 year Treasury rates are 7%. What is the expected 1 year Treasury rate one year from today?

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Expert Solution

the Expected one year treasury one year from today =(1+2 Years Treasury)^2)/(1+1 years Treasury Rate)-1
=(1+ 7%)^2/(1+1%) -1 =13.36%

jeff jeffy answered 2 years ago
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