Kathryn knows that the one-, two- and three-year bond rates in the market currently are 4.5%, 5% and 5.5% respectively. If the one-, two- and three-year liquidity premiums are 0%, 0.3% and 0.35% respectively, the one-year interest rate next year is expected to be:

Group of answer choices

A. 5.61%.

B. 5.10%.

C. 4.90%.

D. 6.02%.

E. 4.01%.