A one-year interest rate is 5.50% and a one-year forward rate two years from now is 6.0%. According to the expectations theory, what is the current two-year rate?
A) The rate cannot be calculated from the information above.
B) 5.0%
C) 5.5%
D) 6.0%
E) 6.25%

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The Answer of A one-year interest rate is 5.50% and a one-year forward rate two years from now is 6.0%. According to the expectations theory, what is the current two-year rate?
A) The rate cannot be calculated from the information above.
B) 5.0%
C) 5.5%
D) 6.0%
E) 6.25%

A One-Year Interest Rate Is 5