Question #$1$: True, False or Uncertain $[10$ Points$]$

Is this statement TRUE, FALSE or UNCERTAIN. You must justify your answer either graphically or in words. No credit will be given without an explanation. $($Hint: You will need to draw two bond markets $($one for Bond A the other for Bond B$)$ and illustrate the impact of the change on the bond markets.

"Suppose that $2$ bonds $($Bond A and Bond B$)$ initially have the same characteristics but then Bond A becomes easier to trade, holding all else constant. As a result, Bond A will pay a lower interest rate than Bond B$."$

Question #$2$: YTM Notation $[8$ Points; $2$ Points each$]$

Example: Write out the YTM of a $25$ year bond purchased today $={?}_o{i}_{25}$

$($a$)$ Write out the YTM of a $11$ year bond purchased today.

$($b$)$ Write out the YTM of a $12$ year bond purchased $3$ years from today.

$($c$)$ Write out the YTM of a $7$ year bond purchased $2$ years from today.

$($d$)$ Write out the YTM of a $1$ year bond purchased $23$ years from today.

Question #$3$: Expectation Theory $[16$ Points$]$

The following table shows the current and expected one$-$year interest rates in following four years.

$\backslash$table$[{[}_0{i}_1,{?}_1{i}_2^e,{?}_2{i}_3^e,{?}_{31}{i}^e,{?}_{4i_5^e}$