3. A researcher consider the weekly yields of the 1-month, 1-year, 5-year, and 10-year Treasury bonds (1408 observations). The estimates of the VAR(2) model are reported in Figure 1. Figure 1: Estimated VAR(2) 3.1. To investigate the effects of the monetary policy tightening, the researcher computes the impulse response functions to a standard deviation positive shock to 1-month yield. Figure 2 shows the responses of each of the variables in the system over 52 weeks. The dotted lines represent confidence intervals. Comment on the transmission of the monetary policy decision to the longer-term rates. [25%] 3.2. The researcher further tests for causality. The Granger causality tests are reporte in Figure 3. The "excluded" variables do not "Granger-Cause" the depen variables under the null hypothesis. Comment on the test outcomes and list implied restrictions on the VAR coefficients. Figure 2: Cholesky Impulse Response Function to a one standard deviation positive shock to the 1-month Treasury yield Figure 3: Granger Causality tests. 3. A researcher consider the weekly yields of the 1-month, 1-year, 5-year, and 10-year Treasury bonds (1408 observations). The estimates of the VAR(2) model are reported in Figure 1. Figure 1: Estimated VAR(2) 3.1. To investigate the effects of the monetary policy tightening, the researcher computes the impulse response functions to a standard deviation positive shock to 1-month yield. Figure 2 shows the responses of each of the variables in the system over 52 weeks. The dotted lines represent confidence intervals. Comment on the transmission of the monetary policy decision to the longer-term rates. [25%] 3.2. The researcher further tests for causality. The Granger causality tests are reporte in Figure 3. The "excluded" variables do not "Granger-Cause" the depen variables under the null hypothesis. Comment on the test outcomes and list implied restrictions on the VAR coefficients. Figure 2: Cholesky Impulse Response Function to a one standard deviation positive shock to the 1-month Treasury yield Figure 3: Granger Causality tests