Calculate the expected rate on five year treasury bond

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Determinants of Interest Rates for Individual Securities

The Wall Street Journal reports that the current rate on 5-year Treasury bonds is 2.00 percent and on 10-year Treasury bonds is 3.65 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a 5-year Treasury bond purchased five years from today, E(5r5). (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Expected rate %

Reference no: EM131842183

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