Question: Given data: Year 1 YTM 5 % , Year 2 YTM 5 . 2 5 % , Year 3 YTM 5 . 7 5 %

Given data: Year
1
YTM
5
%
,
Year
2
YTM
5.25
%
,
Year
3
YTM
5.75
%
,
Year
4
YTM
6
%
,
Year
5
YTM
6.20
%
,
Year
6
YTM
6.40
%
,
Year
7
YTM
6.80
%
,
Year
8
YTM
7
%
,
Year
9
YTM
7.30
%
,
Year
10
YTM
7.80
%
Given data: Year
1
liquidity premium
0
%
,
Year
2
liquidity premiuim
0.10
%
,
Year
3
liquidity premium
0.20
%
,
Year
4
liquidity premium
0.30
%
,
Year
5
liqudity premium
0.40
%
,
Year
6
liquidity premium
0.50
%
,
Year
7
liquidity premium
0.60
%
,
Year
8
liquidity premium
0.70
%
,
Year
9
liquidity premium
0.80
%
,
Year
10
liquidity premium
0.90
%
1.
Calculate the expected one year interest rates under the expectations theory. 2. Calculate: The expected one year interest rates under the liquidity premium theory. 3. Explain the differences in interest rates between the two theories 4. Create line chart of interest rates under the two theories(Use excel)

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