The observed treasury rate is as below. Maturity Yield 1 year 2 years 3 years 4 years 5 years 3% 4% 5% 6% 7% If the pure expectations theory holds, what does the market expect the interest rate to be on one-years securities, two year from now?

The observed treasury rate is as below. If the pure expectations theory holds, what does the market expect the interest rate to be on one-years securities, two year from now