Question: B D E F G H j K L M N 1 Suppose we observe the following rates: 2 3 4 5 1R1 E(2r1) E(3r1)

B D E F G H j K L M N

B D E F G H j K L M N 1 Suppose we observe the following rates: 2 3 4 5 1R1 E(2r1) E(3r1) E(4r1) E(5r1) E(6r1) 0.97% 3.12% 3.73% 5.28% 5.95% 6.27% 6 7 8 9 10 11 12 13 a) If the unbiased expectation theory of term structure of interest rates holds, Compute the following rates: 1R1 0.97% 1R2 1R3 1R4 1R5 1R6 14 15 16 17 18 b) Graph the Yield Curve 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 C) Comment on the graph 38 39 40 41 42 43 44 45 46

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