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Assume that the one-year spot rate is 1% (k1=1%) and the expected future spot rate is 3.01% (Eki) = 3.01%). What two-year spot rate is

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Assume that the one-year spot rate is 1% (k1=1%) and the expected future spot rate is 3.01% (Eki) = 3.01%). What two-year spot rate is consistent with these values under the expectations theory and what is the shape of the yield curve? O k2= 2%, upward sloping Ok2 = 2%, downward sloping O k = 2%, flat Ok2 = 3.01%, upward sloping Assume that the one-year spot rate is 1% (k1=1%) and the expected future spot rate is 3.01% (Eki) = 3.01%). What two-year spot rate is consistent with these values under the expectations theory and what is the shape of the yield curve? O k2= 2%, upward sloping Ok2 = 2%, downward sloping O k = 2%, flat Ok2 = 3.01%, upward sloping

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