5. Pure expectations theory The pure exfectations theory, or the expectations hypothesis, asserts that long-tirm interent rates cas be uted to estimate future short-term interest. rates. Based on the pure expectations theory, is the foliowing statement true or false? The pure expectations theory assumes that investors do not consider long-term bonds to be risker than short-kerm bonds. Thue False The yield on a one-year Treasury security is 4,6900%, and the two-year Treasury security has a 7.0350%[ riels, Assuming that the pure expectations beory is correct, what is the market's estimate of the one-vear Treasury rete sne year from now? (Note: Do not round your intermediate calcutacions.) 9.4325% 10,753% 8.0176% 11.9793% Recall that on a one-year Treasury security the yield is 4.6900% and 7.0350% on a two-year Treasury security, Suppose the one-year security coes not have a maturity risk premlum, but the two-year security does and it is 0.45%. What is the market's estimate of the one-year Treasury rate one year from now? (Note: Do not round your intermediate calculations.) 8.5143% 10.8132% 7.2372% 9.7063% Suppose the yleid on a two-year Treasury security is 5.83%, and the vield on a flve-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now? (Note: Do not round your intermediate calculations, ) 6.53% 6.69% 6.45% 5.46%