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Suppose 2-year Treasury bonds yield 4%, while 1 -year bonds yield 1.1%. r is 2%, and the maturky risk premium is zero, Negative expected inflation

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Suppose 2-year Treasury bonds yield 4%, while 1 -year bonds yield 1.1%. r is 2%, and the maturky risk premium is zero, Negative expected inflation rates, if any. should be indicated by a minus sign. a. Using the expectations theory, what is the yield on a-1-year bond, 1 year from now? Calculate the yield using a geometric average. Do not round intermediate calculations. Round your answer to two decimal places \% b. What is the expected infiation rate in Year 12 Do not round intermediate calculations. Round your answer to two decimal places. What is the expected inflation rate in Year 27 Do not round intermedhte calculations. Mound your answer to two decimal places

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