1.News comes out today that inflation is greater than expected. Hence, this changes the expectation of future interest rates. What will happen to U.S. Treasury Bond Prices and Yields today as a result of the news? You will need to use the Mishkin and Eakins (in lecture 6) analysis in your answer and correctly label the graph.

2.News comes out today that suggests that the stock market is much more attractive than before (corporate earnings have gone up greatly).What will happen to U.S. Treasury Bond Prices and Yields today as a result of the news? You will need to use the Mishkin and Eakins (in lecture 6) analysis in your answer and correctly label the graph.

3.News comes out today that suggests that the stock market is much less attractive than before (corporate earnings have gone down greatly).What will happen to U.S. Treasury Bond Prices and Yields today as a result of the news? You will need to use the Mishkin and Eakins (in lecture 6) analysis in your answer and correctly label the graph.

4.Why does a flat or downward sloping yield curve usually predict a recession? Explain

5.What type of bonds have more interest rate risk? Why?