Using the pure expectations approach to the determination of interest rates, calculate the expected (E) rate of interest of a one-year investment that will be available in 12 months' time (1 i_1), given the following data: Current rate of return on a one-year-to-maturity (0^i_1) instrument: 7.75% per annum Current rate of return on a two-year maturity (0^i_2) instrument: 8.25% per annum A. 7.75% per annum B. 8.25% per annum C. 8.75% per annum D. 9.25% per annum If investors are not indifferent to whether they hold long-term or short-term securities, and need a liquidity premium to hold longer term securities, an investor who needs a liquidity premium of 0.25% per annum will expect to receive ______ on a two-year investment, given the following data: (0^i 1) 8.46% per annum (E_1i_1) 8.55% per annum A. 8.51% per annum B. 8.63% per annum C. 8.80% per annum D. 8.88% per annum