6) Define, explain and distinguish among the shapes of a normal, abnormal, and humped yield curve. What do the different shapes indicate? What factors determine the shape of a yield curve?

7) If the inflation rate is expected to increase would this increase or decrease the slope of the yield curve?

8) Explain the pure expectations theory. What does the pure expectations theory imply about the term structure of interest rates?

9) Describe how macroeconomic factors affect the level of interest rates. How do these factors explain why interest rates have been lower in recent years?