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6. If the 1-year interest rate for 2021 is 4%, the expected 1-year interest rate for 2022 is 3.8%, and the expected 1-year interest rate
6. If the 1-year interest rate for 2021 is 4%, the expected 1-year interest rate for 2022 is 3.8%, and the expected 1-year interest rate for 2023 is 3.6%, what will be the shape of the yield curve? (3 points) a. b. rising (positive) flat falling (negative) C. 7. Based on the yield curve shown to the right (3 points) 1.50% According to the "segmented markets" explanation for the term structure of interest rates (i.e. the yield curve), if demand for short-term credit decreases but the demand for long-term credit increases, draw the new shape of the yield curve. 1.00% Interest Rate (%) 0.50% 1 year 3 years 5 years Time to maturity
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