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The one-year spot interest rate is r1 = 5.9% and the two-year

Question : The one-year spot interest rate is r1 = 5.9% and the two-year

The one-year spot interest rate is r1 = 5.9% and the two-year rate is r2 = 6.9%. If the expectations theory is correct, what is the expected one-year interest rate in one year’s time? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

The one-year spot interest rate is r1 = 5.9% and the two-year rate is r2 = 6.9%. If the expectations theory is correct, what is the expected one-year interest rate in one year’s time? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

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