6. Suppose 1-year Treasury bonds yield 4.10% while 2-year T-bonds yield 4.8%. Assuming the pure

expectations theory is correct, and thus the maturity risk premium for T-bonds is zero, what is the yield

on a 1-year T-bond expected to be one year from now? Round the intermediate calculations to 4

decimal places and final answer to 2 decimal places?

a. 6.70% b. 5.20%

c. 4.90%

d. 5.50%

e. 4.45%