Question: Please tell me how to do problem 7, and please give me the correct answer, thank you so much 7. (5 points) Suppose the interest

Please tell me how to do problem 7, and please give me the correct answer, thank you so much

Please tell me how to do problem 7, and please give me

7. (5 points) Suppose the interest rate on a 1-year T-bond is 5.00% and that on a 2-year T- bond is 4.10%. Assume that the pure expectations theory is NOT valid, and the MRP is zero for a 1-year T-bond but 0.40% for a 2-year bond. What is the yield on a 1-year T-bond expected to be one year from now? Round the intermediate calculations to 4 decimal places. (Show your work)

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