Answer in detail please

Consider two types of discount bonds: a 1-year bond that promises one payment of pound 100 in 1 year; and a 2-year bond that promises one payment of pound 100 in two years. Assuming that investors only care about expected returns and that expected returns on two assets must be equal (arbitrage), derive the prices of the two bonds. Explain why the 2-year interest rate is (approximately) the average of the current 1-year interest rate and next year's expected 1-year interest rate. Define the yield curve. Critically evaluate the following statement: When the yield curve is upward sloping this tells us that financial markets expect short-term rates to be higher in the future