Suppose you observe two zero-coupon Treasury bonds. The rst matures in one year, has face value $300, and has current price $288.46. The second matures in two years, has face value $200, and has current price $188.52. According to the expectations theory of the yield curve, what is the implied one-year interest rate from year 1 to year 2 (that is, the rate between one year from now and two years from now)? Is the yield curve upward or downward sloping? Q a. 2.0% and downward sloping O b. 5.0% and downward sloping O c. 3.5% and upward sloping Q d. 1.5% and upward sloping