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QUESTION 7 Consider the following $1,000 par value zero-coupon bonds: Years until Maturity Bond Yield to Maturity 5% 2 6.5 7 4 According to the

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QUESTION 7 Consider the following $1,000 par value zero-coupon bonds: Years until Maturity Bond Yield to Maturity 5% 2 6.5 7 4 According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? Do NOT enter % sign. If your answer is 0.0678 or 6.78% enter only 6.78. Round your answer to 2 decimal places.)

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