The term structure for zero-coupon bonds is currently: Maturity ( Year ) YTM ( % ) 1 4% 2 5% 3 6% Next year at this time, you expect it to be: Maturity ( Year ) YTM ( % ) 1 5% 2 6% 3 7% a. What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond? b. Under the expectations theory, what yields to maturity does the market expect to observe on 1- and 2-year zeros at the end of the year? Is the market’s expectation of the return on the 3-year bond greater or less than yours?