Question

assume that expectations theory holds true. I'm trying to find what the expected 1 yr yields would be exactly one year from now and 2 years from now is both 1 yr and 2 yr yield rates are 2.6 %

Answer 1

It will be equal to =2.6+2.6/2=2.6. Since short term rates are expected to remain same their average is expected to remain same. Thus yeild curve will be flat

I must say wording you have used in question is not enough to clearly express what you want to know precisely