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You observe the following curve for Treasury securities: Maturity Yield 1 year 6.5% 2 years 6.3% 3 years 6.0% 4 years 5.8% 5 years 5.5%

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You observe the following curve for Treasury securities: Maturity Yield 1 year 6.5% 2 years 6.3% 3 years 6.0% 4 years 5.8% 5 years 5.5% Assume that the pure expectations hypothesis holds. What is your investment return if you plan to lend for 2 years, starting 2 years from today? Select one: a. 6.75% O b. 7.30% O c. 5.30% O d. 6.40% O e. 5.97%

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