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Calculate the yield using a geometric average

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Interest rates on 4-year Treasury securities are currently 5.8%, while 6-year Treasury securities yield 7.85%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now? Calculate the yield using a geometric average. Do not round your intermediate calculations. Round your answer to two decimal places.

Reference no: EM131402096

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