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Question 10 1 pts The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump to

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Question 10 1 pts The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump to 6 percent next year, and increase to 7 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 1-year, risk-free securities today? 6.0% 4.0% 4.5% 5.0% 5.5%

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