Suppose the interest rate on a 1-year T-bond is 5.30% and that on a 2-year T-bond is 6.90%. Assume that the pure expectations theory is NOT valid, and the MRP is zero for a 1-year T-bond but 0.40% for a 2-year bond. What is the yield on a 1-year T-bond expected to be one year from now? Do not round your intermediate calculations. Round your final answer to 2 decimal places.

a. 5.90%

b. 6.01%

c. 6.46%

d. 8.52%

e. 7.71%