• Using the expectations theory and the following term structure of interest rates, calculate the expected 1-year rate, 1 year from now:

Maturity	Yield
1 year	1.0%
2 year	1.5%
3 year	2.7%
4 year	3.2%
5 year	4.5%
6 year	5.3%

1.25%

2.00%

1.50%

0.50%