6-15 EXPECTATIONS THEORY Assume that the real risk-free rate is 2% and that the maturitu risk premium is zero. If a 1-year Treasury bond yield is 5% and a 2-year Treasury band yields 7%, what is the 1-year interest rate that is expected for Year 2? Calculate this viola using a geometric average. What inflation rate is expected during Year 2? Comment on why the average interest rate during the 2-year period differs from the 1-year interest rate expected for Year 2