1.)The yields for Treasuries with differing maturities on a recent day were shown below.

Maturity	Yield
3 months	1.49%
6 months	1.56
2 years	2.45
3 years	3.06
5 years	3.76
10 years	4.32
30 years	4.96

If you were to plot a yield curve based on the information provided above, you would find the shape of this yield curve to be______ yield curve.

If the expectation hypothesis is true, approximately (ignoring compounding) what rate of return do investors expect a 5-year Treasury security to pay starting 5 years from now? Use the 2-decimal point in % to answer this question. Your answer is___________

2.)

A 30-year bond with 8% coupon rate, paid semiannually, currently sells for $800.00. It has a face value of $1,000.

The current yield of this bond is _______%.

If the market rate is assumed to remain constant over the next year, this bonds price one year from today will be ________ todays price of $800.00.

3.) A 5-year GE bond has a face value of $1,000. Its coupon rate is 4%, paid semiannually. Its required rate of return is 4%.

What are the following inputs to calculate this bond's current price (assume you are using the financial calculator)?

N:

FV:

PMT:

i/y:

4.Two bonds make semiannual interest payments of $40. One bond matures in 2 years and the other matures in 10 years. Both bonds currently sells at par ($1,000), meaning that they offer a yield to maturity of 8%. Calculate by how much more (in dollar term) would the 10-year bonds price go down compared to 2-year bonds if the YTM changes to 10%?