The current rate for two-year treasury security

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Reference no: EM132007449

1. The current one-year T-bill rate is .30 percent and the expected one-year rate 12 months from now is .80 percent. According to the unbiased expectations theory, what should be the current rate for a two-year Treasury security? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

2. You contribute $1,000 annually to a retirement account for eight years and stop making payments at the age of 25. Your twin brother (or sister . . . whichever applies) opens an account at age 25 and contributes $1,000 a year until retirement at age 65 (40 years). You both earn 10 percent on your investments. How much can each of you withdraw for 20 years (that is, ages 66 through 85) from the retirement account.

Reference no: EM132007449

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