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A recent edition of The Wall Street Journal reported interest rates of 3.55 percent, 3.90 percent, 4.28 percent, and 4.55 percent for three-year, four-year, five-year, and six-year Treasury notes, respectively. According to the unbiased expectations theory of the term structure of interest rates, what are the expected one-year rates during years 4, 5, and 6? (Do not round intermediate calculations Round your answers to 2 decimal places. (e.g., 32.16) Expected One-Year Rates Year 4 Year 5 Year 6

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Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text aCopy в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Paste Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard EX208 EO Alignment Number Cells EP EQ ER ES ET EU EV EW EX EY EZ FA FB FC 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 YEAR RATES SYMBOL 3.55% 1R3 3.90% 1R4 4.28% 1R5 4.55% 1R6 6 EXPECTED ONE YEAR RATES 4f1- 5f1 = 6f1- FORMULA (1+1R4)A4/(1+1R3)A3-1 (1+1R5)A5/(1+1R4)A4-1 (1+1R6)*6/(1+1R5)A5-1 ((1+0.0390)^4/(1+0.0355)^3)-1 ((1+0.0428)A5/(1+0.039)A4) -1 ((1+0.0455)^6/(1+0.0428)^5)-1 ANSWERS 4.96% 5.81% 5.91% YIELD SPOT Sheet2 AFN BANKING NOTE BIDDING, UNDERWRITING EUAC AW PM LIFE LP I MRP INFLATION YIELD WARRANT fund bond CLEAN INVOICE PRICE 014 - 05:30 15-01-2019

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