1. What is the difference between systematic and unsystematic risk? which is more important to fund manger of equity fund? which can lead to the bankruptcy of a company?
2. One-year Treasury securities yield 3.5%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.85%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.