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?
One year treasury securities yield 6.9 percent
2-year Treasury ...
The solution shows the calculation to arrive at the correct answer for the yield.