upward. Interpret these slopes according to the expectations theory. 2. Suupose that interest rates for one-year bonds are expected to follow this pattern: 3% today, 5% one year from now and 7% two years fron now. What are the current interest rates on two-year and three year bonds, according to the expectations theory? 3. Most economists argur that a boom in the stock market is a sign that profitable business opportunities are expected for the future. Descibe the likely effects of such a boom on the bond supply and interest rates