1. Given: in:-11% ie 1,t+2-9% 1e1,t+3-6% lei,t+4-5% ha liquidity premium on 2-year bonds-0.2% ; liquidity premium on 5-year bonds 0.8% a) Calculate iz and ist using expectation theory b) Calculate i2 and ist using liquidity premium theory c) What can you conclude about the yield curve? 2. Given: 11% iel ,t+,-10% e1,1+4-5% ha-liquidity premium on 2-year bonds-0.3% hs-liquidity premium on 5-year bonds-0.9% a) Assuming 12.-10.3% and is expectation theory b) Assuming i2t-10.4% and is premium theory 9% calculate iel,t+4 using 9.3% calculate iel,t+4 using liquidity