Ask Question
BusinessBusiness
7 April, 04:43

One-year Treasury securities yield 4.15%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 4.4%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities

+4
Answers (1)
  1. F
    7 April, 08:02
    0
    The yield today for 2-year Treasury securities is 4.27%

    Explanation:

    In order to calculate the yield today for 2-year Treasury securities we would have to calculate the following formula:

    2-year treasury yield = [ (1 + 1-yr treasury yield) * (1 + 1-yr treasury yield, 1 year from now) ]1/2 - 1

    = [ (1 + 0.0415) * (1 + 0.044) ]∧1/2 - 1

    = [1.0873]∧0.5 - 1

    = 1.0427 - 1 = 0.0427, or 4.27%

    The yield today for 2-year Treasury securities is 4.27%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “One-year Treasury securities yield 4.15%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 4.4%. If the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Which of the following might explain the evidence of an endowment effect in behavioral economics? A) Government regulation B) Knowledge and experience C) The federal tax code D) Class envy
Answers (1)
The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises, A. the demand curve shifts leftward. B. there is a movement up along the demand curve to a smaller quantity demanded. C.
Answers (1)
One recent study suggests that the more professional technicians or other "knowledge workers" an industry has, the: A. more revenue will be produced. B. greater chance that objectives will be met. C. greater chance that it will create new jobs. D.
Answers (1)
During March, Patt, Inc. purchases and uses 8,800 pounds of materials costing $35,640 to make 4,000 tiles. Patt's standard material cost per tile is $8 (2 pounds of material * $4.00).
Answers (1)
An interest group forms in order to tackle the environmental issue of fracking. The leaders decide to use social media sites and e-mail to ensure their members register and to provide updates on developments and legislation.
Answers (1)
New Questions in Business
Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services. Event Market for Factors of Production Market for Goods and Services 1.
Answers (1)
Expand the employee payroll program to include hourly based and salary based employees. this phase uses an array of employee objects, inheritance for different classes of employees, and polymorphism for salary computation.
Answers (1)
Chandra spent part of her workday booking flights and accommodations for her vacation next month. she tells herself that this is okay because all of her colleagues use the internet for personal business at work, and they do it far more than she does.
Answers (1)
After carefully assessing the market potential for hybrid motorcycles, it was decided at the corporate headquarters of HyCycles Inc. that the company would be launching a hybrid version of all its motorcycle models within the next two years.
Answers (1)
Why are extensive training and team building activities important when managing contracted relationships?
Answers (1)
Home » Business » One-year Treasury securities yield 4.15%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 4.4%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities
Sign In
Ask Question
Menu
Subjects