Question: Please answer it and upload back. Please draw the graph as. You only need to write down the equation for full points, however, 5 points

Please answer it and upload back. Please draw the graph as. You only need to write down the equation for full points, however, 5 points bonus will be given if calculating out the answer.

Maturity Yield

1 year 6.0%

2 years 6.1%

3 years 6.2%

4 years 6.3%

5 years 6.4%

6 years 6.5%

If PEH holds, what will be the market expectation of the interest rate on three-year security, 1 year from now?

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