Using the unbiased expectations theory what is the one-year


Forecasting Interest Rates On May 23, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows:

1R1 = 6.20%, 1R2 = 6.70%, 1R3 = 7.20%, 1R4 = 7.40%

Using the unbiased expectations theory, what is the one-year forward rate on zero-coupon Treasury bonds for year four as of May 23, 20XX

A. 8% B.25.28% C.6.875% D.7.40%

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Using the unbiased expectations theory what is the one-year
Reference No:- TGS02738525

Expected delivery within 24 Hours