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 4 years, starting 1 year from today?

Select one:

a. 5.25%

b. 5.00%

c. 7.30%

d. 6.30%

e. 6.40%