The term structure for zero-coupon bonds is currently:

Maturity (Years)	YTM (%)
1	4.3%
2	5.3
3	6.3

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

Maturity (Years)	YTM (%)
1	5.3%
2	6.3
3	7.3

a.	What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Rate of return

%

b-1.	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? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Maturity	YTM
1	%
2	%