Do the following problem @ 28 points. Show all work for full credit.

Given the following data on debt U.S. Treasury debt instruments:

• 1-year note yield = 4.42% 7-year note yield = 5.64%
• 2-year note yield = 4.69% 8-year note yield = 5.70%
• 3-year note yield = 5.02% 9-year note yield = 5.86%
• 4-year note yield = 5.02% 10-year note yield = 5.95%
• 5-year note yield = 5.35% 11-year note yield = 5.90%
• 6-year note yield = 5.50% 12-year note yield = 5.99%

And constant premiums of 0, .17%, .41%, .63%, .82%, .98%, 1.12%, 1.22%, 1.30%, 1.37%, 1.42%, 1.45%, 1.47%

1. Calculate the expected market yields for a (1,5,2) path.
2. Calculate the expectations yields for a (3,4,1) path.
3. Calculate the real world yield for a (3,5) path.
4. Calculate the expected preferred habitat yield for a 5-year note purchased at the beginning of year 2.