4) Assume a 2-year maturity Treasury debt is yielding 2% and a 3-year maturity Treasury debt is yielding 3%, what is the 1-year forward interest rate 2 years from now? Show calculations. a) How would you interpret this forward rate if the pure expectations theory holds true? b) If 1-year maturity treasury debt is yielding 3% and TIPS are yielding 1%. What is the expected inflation rate over the next year? Suppose that you believe that actual inflation next year is going to be 5%. What would be an effective way of investing in bonds to benefit from this? Explain how this will work