You are presented with two alternatives: i) You can buy a three-year bond with a yield to maturity of 7% ii) You can buy a one-year bond with a yield to maturity of 6%, then purchase another one-year bond with a yield to maturity of 7%, and when the second bond matures, purchase another one-year bond with a yield to maturity of 8%. Based on the above information: a) What is your expected annual rate of return for the first strategy? b) What is your expected annual rate of return for the second strategy? c) What can you say about the expected return in part a) and b)? d) If the liquidity premium theory of the term structure of interest rates is correct, which one of those choices would you pick? Why