Help! I've done this problem over 5 times and I keep getting ~30% but the answer to the problem is 18%. However I have to show how to get 18%.
Any help is appreciated!!
Also, if you guys may, this one too.
"Interest rates on 5-year Treasury securities are currently 8%, while the 8-year Treasury securities yield 10%. If the pure expectations theory is correct, what does the market believe that 3-year securities will be yielding 5 years from now?"
I have no idea how to do this one!