Question: According to the Expectations Hypothesis, what is the expected rate of interest on a 2-year zero-coupon bond implied by the following term structure: A 1-year

According to the Expectations Hypothesis, what is the expected rate of interest on a 2-year zero-coupon bond implied by the following term structure: A 1-year zero-coupon bond has a yield to maturity of 2% and a one year bond in the second year has a yield to maturity of 4%.

6.00%

6.50%

3.00%

5.16%

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