What does the market think will be the yield

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Reference no: EM131981201

Assume that the pure expectations hypothesis is correct. The current term structure of interest rates for Treasury securities is as follows:

Maturity Yield

1 year 6.0%

2 years 6.5

5 years 7.0

10 years 7.5

15 years 7.2

20 years 6.5

What does the market think will be the yield on 5-year Treasury securities 10 years from now?

6.60%

6.95%

7.05%

7.50%

8.10%

Reference no: EM131981201

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