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Consider the following $1,000 par value zero-coupon bonds: Bond Years until Maturity Yield to Maturity A 1 5.9 % B 2 6.9 C 3 7.4

Consider the following $1,000 par value zero-coupon bonds:

Bond	Years until Maturity	Yield to Maturity
A	1	5.9	%
B	2	6.9
C	3	7.4
D	4	7.9

According to the expectations hypothesis, what is the markets expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Interest rate %

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