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Question : The one-year spot interest rate is r1 = 5.9% and the two-year

The one-year spot interest rate is *r*_{1} = 5.9% and the two-year rate is *r*_{2} = 6.9%. If the expectations theory is correct, what is the expected one-year interest rate in one year’s time? **(Do not round intermediate calculations. Round your answer to 2 decimal places.)**

The one-year spot interest rate is |