1. Interest rates on 4-year Treasury securities are currently 6.0%, while 6-year Treasury securities yield 7.45%. 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 intermediate calculations. Round your answer to two decimal places.

2. The real risk-free rate, r*, is 1.2%. Inflation is expected to average 1.1% a year for the next 4 years, after which time inflation is expected to average 3.6% a year. Assume that there is no maturity risk premium. A 9-year corporate bond has a yield of 11.3%, which includes a liquidity premium of 0.2%. What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places.