Consider the following spot interest rates for maturities of one, two, three, and four years. r 1 =

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Consider the following spot interest rates for maturities of one, two, three, and four years.

           r1 = 5.2%    r2 = 5.6%     r3 = 6.3%     r4 = 7.1%

Assuming a constant real interest rate of 2 percent, what are the approximate expected inflation rates for the next four years? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the “%” sign in your response.)

I1 %

  I2 %

  I3 %

   I4 %
hint Use the Fisher hypothesis and the unbiased expectations theory.
 
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