Question: 8. Chapter MC, Section .06, Problem 078.Algo Suppose the interest rate on a 1-year T-bond is 4.10% and that on a 2-year T-bond is 6.30%.

8. Chapter MC, Section .06, Problem 078.Algo Suppose the interest rate

8. Chapter MC, Section .06, Problem 078.Algo Suppose the interest rate on a 1-year T-bond is 4.10% and that on a 2-year T-bond is 6.30%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rates 1 year from now? Do not round your intermediate calculations. Round your final answer to 2 decimal places. Oa. 6.23% Ob. 5.20% Oc. 4.63% Od. 8.90% Oe. 8.55%

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