Suppose that the yield curve shows that the one$-$year bond yield is $8$ percent, the two$-$year yield is $7$ percent, and the three$-$year yield is $7$ percent. Assume that the risk premium on the one$-$year bond is zero, the risk premium on the two$-$year bond is $1$ percent, and the risk premium on the three$-$year bond is $2$ percent.

a$.$ What are the expected one$-$year interest rates next year and the following year?

The expected one$-$year interest rate next year $=\%$

The expected one$-$year interest rate the following year $=\%$

b$.$ If the risk premiums were all zero, as in the expectetions hypothesis, what would the slope of the yield curve be$?$

The slope of the yield curve would be $($flat$/$vertical$/$downward$/$upward$)$