At your favorite bond store, Bonds-R-Us, you see the following prices: One-year $100 zero selling for $90.19 Three-year 7.5% coupon $1,000 par bond selling for $835. Two-year 12% coupon $1,000 par bond selling for $1,125. Assume that the expectations theory for the term structure of interest rates holds, no liquidity premium exists, and the bonds are equally risky What is the implied two-year rate one year from now? 5