Current market yields on U.S. government securities are distributed by maturity as follows:

Draw a yield curve for these securities. What shape does the curve have? What significance might this yield curve have for an investing institution with 75 percent of its investment portfolio in 7-year to 30-year U.S. Treasury bonds and 25 percent in U.S. government bills and notes with maturities under one year? What would you recommend tomanagement?

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3-month Treasury bills1.90 percent 6-month Treasury bills 1-year lreasury notes 2.2 percent 2-year Ireasury notes2.oI percent 3-year Treasury notes2.82 percent 5-year Treasury notes 3.28 percent -year Treasury notes .06 percent 10-year Treasury bonds 3.98 percent 20-year Treasury bonds4.69 percent 50-year lreasury bonds .2) percent 2.10 percent