The term structure for zero$-$coupon bonds is currently:

Next year at this time, you expect it to be:

Required:

a$.$ What do you expect the rate of return to be over the coming year on a $3-$year zero$-$coupon bond?

b$.$ Under the expectations theory, what yields to maturity does the market expect to observe on $1-$ and $2-$year zeros at the end of the

year?