5. Pure expectations theory: Multi-vear periods Oho would like to invest a certain amount of money for three yesrs and considers investing in ( 1 ) a one-year bond that pays 3 percent, followed by a two-year bond that pars the forward rate, or (2) a three-year bond that pays 8 percent in each of the next three vears. Cho is considering the following investment strategies: Strategy A: Buy a one-year bond that pays 3 percent in vear one, then buy a two-vear bond that pays the two-year forward rate in Years two and three. Strategy B: Buy a three-year bond that pays \& percent in each of the next three years. If the two vear bond purchesed one year from now pays 12 percent annually, Cho will choose. Which of the foliowing describes condinions under which Cho would be indifferent betwoen Stratwiy A and Strategy B? The rate on the twoyes bond purchased one year from now is 10.590 percent. The rate on the nowyear bond purchased one year from now is 11.120 percont. The rate on the two-vear bond purchased one vear from now is 9.107 percent. The rate on the two-year bond purchased one year from now is 9.743 percent