What do markets believe the yield on the 1-year security

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Suppose that the yield on 1-year Treasury securities is 2.25 percent, 2-year securities yield 2.75 percent, 3-year securities yield 2.90 percent and 4-year securities yield 2.95 percent. There is no maturity risk premium.

Based on the pure expetations theory of the yield curve, what do markets believe the yield on the 1-year security will be 3 years from now?

Input your answer as a whole number, rounded to two decimal places. Thus, if your answer is 2.477%, input 2.48.

Reference no: EM132499770

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