At your favorite bond store, Bonds-R-Us, you see the following prices:
One-year $100 zero selling for $90.19
Three-year 10% coupon $1,000 par bond selling for $1,000
Two-year 10% coupon $1,000 par bond selling for $1,000
Assume that the expectations theory for the term structure of interest rates holds, no liquidity premium exists, and the bonds are equally risky.
What is the implied one-year rate two years from now?