2. Suppose you invest for one year. You consider buying a 3-year zero coupon bond and selling it after one year, or a 5% coupon bond for 3 years, coupons paid once a year and selling it after one year. The 1-year interest rate is 2%. The forward rate if is 2.5%. The forward rate ifz is 2.25% a. What is the 2-year interest rate in the market? What is the 3-year interest rate in the market? b. Under the expectations hypothesis, what are the expected 1-year HPR on the 3-year zero and on the 3-year coupon bond? Answer using calculations. C. What is the price today of a 2-year zero bond? d. Without calculations is the YTM of the coupon bond smaller of larger than 5%? e. Under the liquidity preference theory, assuming that the liquidity risk premium (LPR) on a 2-year zero bond is 0.3%, is the 1-year interest rate expected to rise or fall next year