Interest rates on 4-year treasury securities are currently


Interest rates on 4-year Treasury securities are currently 8%, while 6-year Treasury securities are 8.5%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from today?

A. 8.5%

B. 9%

C. 9.5%

D. 7.75%

E. None of the above

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Financial Accounting: Interest rates on 4-year treasury securities are currently
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