31) Yield curve and the business cycle

a. Compute the annual yield to maturity for each bond shown below.

Treasury bond	Years to maturity	Current price, $	Annual coupon rate, %	Coupon frequency	Par value, $	Annual YTM, %
A	1	990	3.00	Annual	1,000
B	5	970	3.60	Semi-annual	1,000
C	10	960	4.00	Semi-annual	1,000
D	20	950	4.40	Quarterly	1,000
E	30	940	4.80	Quarterly	1,000

b. Use the above results to plot a Treasury yield curve (3 points).

c. Describe the above yield curve, then explain what future economic conditions the yield curve predicts and why.