QUESTION $1$: If three$-$year securities are yielding $6\%$ and two$-$year securities are yielding $5\mathrm{.}5\%,$ future short$-$term rates are expected to $\_\_\_\_\_\_,$ and outstanding security prices are expected to $\_\_\_?$

a$.$ fall; fall.

b$.$ rise; fall.

c$.$ fall; rise.

d$.$ rise; rise QUESTION $2$: what is the expected one$-$year rate two years from now as implied by the two actual rates above?

a$.4\mathrm{.}7\%$

b$.5\mathrm{.}8\%$

c$.6\mathrm{.}5\%$

d$.7\mathrm{.}0\%$

e$.7\mathrm{.}5\%$