Question: Question 1 (this question has two parts a) and b) ((1+1+1) + (3+2) = 8 marks) Parta) The table shows term to maturity of Australian

Question 1 (this question has two parts a) and b) ((1+1+1) + (3+2) = 8 marks) Parta) The table shows term to maturity of Australian bonds and their respective yields on 22 April 2021. Using this information answer the following questions. Bond Yield 0.07% 0.07% Term to Maturity 1 year 2 years 5 years 10 years 20 years 30 years 0.70% 1.66% 2.42% 2.64% 1. II. Will the market interest rate increase or decrease in the future? Explain clearly. Will you invest in short term or long term bonds? Explain clearly. What do you think is the shape of the yield curve? Explain your answer. 11

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