Answer:
the one year rate three years into the future will be of 10.05%
Explanation:
Both securities will "yield" the same for the first three years
but the 4-year treasury has a premium on the fourth year which makes the yield go up to 7%
[tex](1+0.06)^3(1+r)=(1.07)^4\\[/tex]
[tex](1+r)= \frac{1.07^4}{1.06^3} \\r= \frac{1.07^4}{1.06^3} -1[/tex]
r = 0.10057 = 10.05%
