The real risk-free rate of interest is 4 percent. Inflation is expected to be 3 percent this coming year, jump to 4 percent next year, and increase to 5 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 2-year, risk-free securities today?

7.00%

5.50%

7.50%

6.00%

6.50%