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Three-year treasury security rate

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Suppose we observe the three-year Treasury security rate to be 12%, the expected one-year rate next year - E(2r1) - to be 8% and the expected one-year rate the following year - E(3r1) - to be 9%.  Using the unbiased expectations theory, what is the one-year Treasury security rate? Steps Please

Reference no: EM131317928

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