The real risk-free rate of interest is 1 percent. Inflation is expected to be 5 percent this coming year, jump to 7 percent next year, and increase to 8 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 2-year, risk-free securities today? O 6.5% O 8.0% O 8.5% O 7.5% O 7.0% Which of the following is not a component of interest rates for a long-term corporate security discussed in Chapter 6? A liquidity premium O A maturity risk premium O The real risk-free rate O A subprime premium O An inflation premium