Us treasuries due to mature in one year were yielding

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Suppose that "0" coupon US treasuries due to mature in one year were yielding .39%, while "0" coupon US treasuries maturing in 2 years were yielding .83%. If you were a risk neutral investor who wanted to choose between these bonds the one that offered you the highest expected rate of return after 1 year, what would you have to expect about 1 year Treasury yields 1 year from now in order to pick today's 2 year bond? Explain your answer and show calculations.

Reference no: EM13743153

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