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3. If the current YTM on a 1-year bond is 6% and we expect the YTM on the 1-year bond 1 year from now is

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3. If the current YTM on a 1-year bond is 6% and we expect the YTM on the 1-year bond 1 year from now is 9%, (a) calculate the current YTM on a 2-year bond and (b) determine the shape of the yield curve. 4. Suppose the U.S. Treasury just issued 6%, 10-year annual-coupon TIPS (Treasury Inflation- Protected Securities) at a price equal to its face value of $1,000. If the CPI (Consumer Price Index) rises by 2% in the first year, calculate the annual coupon payment at the end of Year 1

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