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3. Assuming the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one

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3. Assuming the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one to five years, and plot the resulting yield curves for the following paths of one-year interest rates over the next five years: How would your yield curves change if people preferred shorter-term bonds to longer-term bonds? 4. The table below shows current and expected future one-year interest rates, as well as current interest rates on multiyear bonds. Use the table to calculate the liquidity premium for each multiyear bond 5. Compute the price of a share of stock that pays a $1 per year dividend and that you expect to be able to sell in one year for $20, assuming you require a 15% return

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