Two Economics Questions, please I need help on answering them?

Question

1.Assume that an investor is risk-neutral (i.e. assume that the investor always chooses the investment with the higher expected rate of return even if it is riskier). If the yield on 1-year marketable CD's is 6% while the yield on 2-year marketable CD's is 7% and this investor purchased the 1 year CD, what must (s)he expect to happen to short term interest rates over the coming year?

2) In question # 1 above, what is the expected interest rate level one year from now that would equalize the expected rate of return on one year and two year CD's if both were held for one year?

Answer 1

reinvestment  in one year you will receive exactly Wat the market you  invest on , for that year, the following year if you do not move to mack a Chang the Bank will reinvest the Manny ,including the interesting for that year for the new rate Wat ever is.so if the market  is one year 6% an 2years 7 % you must tack the 6%, this way you can drow you manny to the end of the year and renvest  it .remembr do not envest all  you monny for moltible years anles you do not neat it.alwes in vest    you monny in two parts, for hight yeall, a secon  for  the evelebility,. alwes    have a flexebility in case you nead the monny or you will pay fine.