You observe the following curve for Treasury securities:

Maturity Yield

1 year 6.0%

2 years 6.3%

3 years 6.5%

4 years 7.0%

5 years 7.2%

Assume that the pure expectations hypothesis holds. What is your investment return if you plan to lend for 3 years, starting 2 year from today?

Select one:

a.8.75%

b.7.80%

c.7.70%

d.6.75%

e.6.80%