What is one year forward rate expected on treasury bills

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Assume the current interest rate on a 1-year Treasury bond (1R1) is 5.70 percent, the current rate on a 2-year Treasury bond (1R2) is 6.45 percent, and the current rate on a 3-year Treasury bond (1R3) is 7.70 percent. If the unbiased expectations theory of the term structure of interest rates is correct, what is the 1-year forward rate expected on Treasury bills during year 3, 3f1? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 2 years from now.

Reference no: EM131304681

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