Observing the Following Term Structure; a US Treasury Bond Maturing

question 2

Multiple Choice

Observing the following term structure; a US treasury bond maturing in 1 year has a yield of 5% while US Treasury bond maturing in 2 years has a yield of 6%; what is the expected 1 year rate,1 year from now?

• A) 7.00%
• B) 7.01%
• C) 7.30%
• D) 5.66%

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