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Consider the following $1,000 par value zero-coupon bonds: Bond A 1 Year to Maturity 5.50% Yield to Maturity Bond B 2 Year to Maturity 7.00%

Consider the following $1,000 par value zero-coupon bonds: Bond A 1 Year to Maturity 5.50% Yield to Maturity Bond B 2 Year to Maturity 7.00% Yield to Maturity Bond C 3 Year to Maturity 7.50% Yield to Maturity Bond D 4 Year to Maturity 8.00% Yield to Maturity Bond E 5 Year to Maturity 10.25% Yield to Maturity

The expected 1-year interest rate 2 years from now should be __________.

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