The yield to maturity on one-year zero coupon bonds is 4.54%. The yield to maturity on two-year zero coupon bonds is 6.62%.

Required:

a. What is the forward rate of interest for the second year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. According to the expectations hypothesis, what is the expected value of the one-year interest rate for next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)