Question: This question illustrates the upward sloping yield under the pure expectations theory. Consider the followings: The current yield for $1-$year bond is $7\mathrm{.}5\%$ p$.$a$.,$ compounded annually. The current yield for $2-$year bond is $8\mathrm{.}7\%$ p$.$a$.,$ compounded annually. The current yield for $3-$year bond is $10\mathrm{.}5\%$ p$.$a$.,$ compounded annually. Based on the information above, what is

This question illustrates the upward sloping yield under the pure expectations theory. Consider the followings: The current yield for $1-$year bond is $7\mathrm{.}5\%$ p$.$a$.,$ compounded annually. The current yield for $2-$year bond is $8\mathrm{.}7\%$ p$.$a$.,$ compounded annually. The current yield for $3-$year bond is $10\mathrm{.}5\%$ p$.$a$.,$ compounde