1)(20 points total) Use the links below to answer the following questions:

Go to http://research.stlouisfed.org/fred2/data/GS10.txt for data on the 10 year US GS

Go to http://research.stlouisfed.org/fred2/data/TB3MS.txt for data on the 3 month T-bill

a. (10 points) In the space below, draw a yield curve representing the conditions as of December 2007 along with drawing another yield curve representing the conditions as of December 2008. Be sure to label your yield curves with the date as a subscript.

b. (10 points)What has happened to the position and slope of the yield curve and are these results consistent with the three term structure facts?Be sure to refer to each term structure fact and apply it to this example.