Explore BrainMass

Explore BrainMass

    Anticipate the yield on 1-year treasury 1-year from now

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    One year treasury securities yield 6.9 percent, while 2-year Treasury securities yield 7.2 percent. If the expectations theory is correct (that is, the maturity risk premium = 0) what does the market anticipate will be the yield on 1-year treasury securities on one year from now?

    a. 6.0%
    b. 6.7%
    c. 7.2%
    d. 7.5%
    e. 8.0%.

    © BrainMass Inc. brainmass.com March 4, 2021, 6:06 pm ad1c9bdddf
    https://brainmass.com/business/finance/anticipate-yield-year-treasury-year-now-28869

    Solution Preview

    One year treasury securities yield 6.9 percent
    2-year Treasury ...

    Solution Summary

    The solution shows the calculation to arrive at the correct answer for the yield.

    $2.49

    ADVERTISEMENT