Calculate the yield using geometric average

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Reference no: EM132039125

Expectations Theory

One-year Treasury securities yield 3.65%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.85%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

Do I use Excel or a calculator to to figure out the formula for this problem?

Reference no: EM132039125

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