The pure expectation s theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates Based on the pure expectations theory, is the fellowing statement true or false? A certificate of deposit (CD) for two years will have the same yield as a CD for one year followed by an investment in another one-year CD after one year. O True O False The yield on a one-year Treasury security is 4.2300%, and the two-year Treasury security has a 6.3500% yield. Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? O 10.3077% o 7.2335% O 8.5100% 9.2014% Recall that on a one-year Treasury security the yield is 4.2300% and 6.3500% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.3500%. What is the market's estimate of the one-year Treasury rate one year from now? o 7.3000% Q 8.8920% 6.6300% o 9.9060% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a nve ve Treasury security is 6.20%, Assuming that the pure expectations theory is correct, what is the market's estimate of the three yer Treesury rate two years from now? 6.69% 7.10% 5.46% 6.45% 0 o