3 Assume that let = 0.30% and that lat = 0. If the one-year interest rate is 5% and the two-year interest rate is 5.75%, then 1+1 is equal to: O A 5.45% OB 6.05% C 5.30% D. 5.90% 8 The expectations theory is successful in explaining: 1. Why the yield curve is usually upward sloping. II. Why yield curves slope upward when short-term rates are low. O A Only Il is correct. OB. Only 1 is correct. OC. Both I and II are correct. O D. Both I and II are incorrect