14 15 a) What is yield curve? b) Why investors closely track the yield curve? c) Use the table for the question(s) below. Suppose the term structure of interest rates is shown below: 17 18 Term 1 year 2 years 3 years 5 years 10 years 20 years Rate 5.00% 4.80 4.60% 4.50% 4259 4.15% After examining the yield curve, what is the shape of this yield curve? 20 21 d) Using the table in e), what predictions do you have about interest rates in the future? About future economic growth and the overall state of the economy? 23 24 Format BIU 26 27 29 30 > S (3 points)