Consider the following $1000 zero-coupon bonds selling at par: Bonds Years to Maturity YTM A 1 6.5% B 2 7.5% C 3 8.

Consider the following $1000 zero-coupon bonds selling at par:

Bonds

Years to Maturity

YTM

A

1

6.5%

B

2

7.5%

C

3

8.5%

According to the expectations hypothesis, what is the expected 1-year interest rate 2 years from now?