What is the current yield on a 2 year t bill

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1. A one-year Treasury security offers a 4 percent yield to maturity (YTM). A two-year Treasury security offers a 4.25 percent YTM. According to the expectations hypothesis, what is the expected interest rate on a one-year security next year?

2. A one-year Treasury bill offers a 6 percent yield to maturity. The market's consensus forecast is that one-year T-bills will offer 6.25 percent next year. What is the current yield on a 2-year T-bill if the expectations hypothesis holds?

Reference no: EM131329241

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