Assume that interest rates for one-year securities are expected to be 3 percent today, 6 percent one year from now, and 7 percent two years from now. Using only the pure expectations theory, what are the current interest rates on two-year and three-year securities. How do I calculate this?

One-year forward rate 2 years from now = [(1+3- today rate)3 /(1+6 year rate)1/(1+7)2]-1

= [(1+0.3) 3/ (1+0.6)1/(1+0.7)2]-1