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7. Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 7.90%. Assuming the pure expectations theory is

7. Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T-bond is 7.90%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rates 1 year from now? Round the intermediate calculations to 4 decimal places and final answer to 2 decimal places A. 10.44 B. 10.88 C. 12.73 D. 13.16

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