Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity

A 1 5.90 %

B 2 7.40 %

C 3 7.90 %

D 4 8.40 %

E 5 10.75 %

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

Multiple Choice

11.46%

20.67%

8.91%

18.62%