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Suppose the interest rate on a 1-year T-bond is 5.0%, that on a 2-year T-bond is 6.0%, and that on a 3-year T-bond is 8.0%.

Suppose the interest rate on a 1-year T-bond is 5.0%, that on a 2-year T-bond is 6.0%, and that on a 3-year T-bond is 8.0%. Assuming the pure expectations theory, what does this mean for expected 1-year rates investors can expect to receive during year the second and third years?

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