5. Pure expectations theory: Multi-year periods Jacques would like to invest a certain amount of money for three years and considers investing in (1) a one-year bond that pays 5 percent, followed by a two-year bond, or (2) a three-year bond that pays 7 percent in each of the next three years. Jacques is considering the following investment strategies: Strategy A: Buy a one-year bond that pays 6 percent in year one, then buy a two-year bond that pays the two-year forward rate in years two and three. Strategy B: Buy a three-year bond that pays 7 percent in each of the next three years. If the two-year bond purchased one year from now pays 11 percent annually, Jacques will choose Which of the following describes conditions under which Jacques would be indifferent between Strategy A and Strategy B? The rate on the one-year bond purchased one year from now is 5.453 percent. The rate on the one-year bond purchased one year from now is 6.904 percent. The rate on the one-year bond purchased one year from now is 7.504 percent. O The rate on the one-year bond purchased one year from now is 7.879 percent