1. The following table states the yields to maturity of one-year, two-year and three-year Treasury notes. (Hints: Treasury note is discount bond with face value of $1,000.)

Term	1-year	2-year	3-year
YTM	2.81	2.92	2.98

1(b) Compute the price of the three-year Treasury note. (4 marks)

1(c) What is the duration of the three-year Treasury note? (2 marks)

1(d) Assuming the expectation theory is the correct theory of the term structure, calculate the expected one-year yield rate of next year. (4 marks)

1(e) Assuming the expectation theory is the correct theory of the term structure, calculate the expected one-year yield rate of 2 years later. (4 marks)