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The current yield curve is inverted. The spot rates for zero-coupon bonds for the next few years are provided below. Due to a data glitch,

The current yield curve is inverted. The spot rates for zero-coupon bonds for the next few years are provided below. Due to a data glitch, the spot rate for this year (year 1) and the next year (year 2) are missing. What is the inferred short rate for the fifth year?

Year 3 4 5 6 7
Spot rate (%) 2.49 2.41 2.21 2.32 2.68

Group of answer choices

A. 4.87%

B. 2.87%

C. 2.17%

D. 1.41%

E. 9.02%

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