8. Pure expectations theory AaAa The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates Based on the pure expectations theory, is the following statement true or false? A certificate of deposit (CD) for two years will have the same yield as a CD for one yearollowed by an investment in another one-year CD after one year True O False The yield on a one-year Treasury security is 5.6100%, and the two-year Treasury security has a 7.5700% yield Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? 8.1260% 12.1412% O 10.3984% 9.5600% Recall that on a one-year Treasury security the yield is 5.6100% and 7.5700% on a two-year Treasury security Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.3000%. what is the market's estimate of the one-year Treasury rate one year from now? 7.6160% 11.3790% 8.9600% 10.2140% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-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? 7-10% 6.45% 6.61% 6.69%