The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that investors do not consider long-term bonds to be riskier than short-term bonds. True False The yield on a one-year Treasury security is 5.8400%, and the two-year Treasury security has a 7.0100% yield. Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? 8.1900% 9.3366% 6.9615% 10.4013% Recall that on a one-year Treasury security the yield is 5.8400% and 7.0100% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.3000%. What is the market's estimate of the one-year Treasury rate one year from now? 6.4520% 9.6390% 8.6530% 7.5900% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now? 5.46% 6.61% 6.45% V