What is the one year forward rate expected on treasury bills

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Reference no: EM131834990

Assume the current interest rate on a 1-year Treasury bond (1R1) is 6.00 percent, the current rate on a 2-year Treasury bond (1R2) is 6.75 percent, and the current rate on a 3-year Treasury bond (1R3) is 8.00 percent. If the unbiased expectations theory of the term structure of interest rates is correct, what is the 1-year forward rate expected on Treasury bills during year 3, 3f1? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131834990

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