(30 points) Consider the following two investment opportunities or cash flow streams where the interest rate is constant at 5% per year. A=(10,5,5,5),B=(10,7,8) a) (10 points) Which investment would you choose according to the net present value criteria? b) (5 points) What is the internal rate of return of B ? c) (5 points) How would your answer change in part a) if there is a term structure of interest rates so that the spot rates are s1=5%,s2=8% and s3=10% ? d) (5 points) What are the short rates for years 1,2 and 3? e) (5 points) What is your forecast of the spot rates for a term of 1 and 2 years after a year passes by