Question: 5. The following pattern for one-year Treasury bills is expected over the next four years: Year 1: 1% Year 2: 2% Year 3: 3% Year

5. The following pattern for one-year Treasury bills is expected over the next four years: Year 1: 1% Year 2: 2% Year 3: 3% Year 4: 4% a. What return would be necessary to induce an investor to buy a i. two-year security ii. three-year security iii. four year security b. Graph the term structure of interest rates for years 1 through 4

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