please do 4

Where relevant, assume that you are answering questions for/about a risk-neutral investor, i.e.. This exercise should help you to understand the formulas (and the intuition behind them) discussed in lecture. Suppose that the 1-year interest rate is 5% and that the expected future 1-year interest rates in one year and in two years are 6% and 7% Question 1 1 pts What should be the 2-year interest rate raz) according to the expectations theory? Question 2 1 pts Based on the value of roz you found above, what are the 1-year holding period returns for the following strategy: Buy a 2-year bond with $1 face value) and sell it after one year. Question 3 1 pts Based on the value of roz you found above, what are the 1-year holding period returns for the following strategy. Buy a 1-year bond with $1 tace value) and sell it after one year Question 4 1 pts What is the forward rate from 1 to 3, assuming the expectations hypothesis holds