Question: Please answer the following question attachted in the image below. Draw the yield curve described as follows: Interest rates: 1% in year 1, 1.5% in
Please answer the following question attachted in the image below.

Draw the yield curve described as follows: Interest rates: 1% in year 1, 1.5% in year 2, 2% in year 3, 3.5% in year 4. Term premiums: 0.5% for a one-year bond, rising by 0.25% for each additional year of maturity. 4 W 2 1 2 3 4 5 Mark the axes above clearly indicating what the axes measure and what the exact value of the important points are: (x,y) The yield curve above suggests which of the following is the predominant short to medium-term economic outlook among market participants? (circle the one you think is most appropriate): recession stable growth recovery Points on graph: (horizontal co-ordinate, vertical co-ordinate): Point 1: (. Point 2: ( Point 3: (_ Point 4: (_
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