What is the market estimate of the one-year treasury rate

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Reference no: EM131855822

One-year Treasury security has the yield of 4.45%, and 6.50% for the two-year Treasury security. Suppose that one-year security does not have a maturity risk premium, but the two-year does have a maturity risk premium of 0.40%. What is the market's estimate of the one-year Treasury rate one year from now? (Hint: adjust the two-year rate by subtracting the maturity risk premium from the rate).

Reference no: EM131855822

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