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What effect did the Bush Tax Cut have on bond interest rates? What are the differences among the expectations, market segmentation, and liquidity premium theories for the term structure of interest rates? (Key assumption and implication, which facts can be explained by each theory) Draw a yield curve and discuss what is shown by a yield curve. Distinguish between primary markets and secondary markets. Distinguish between money markets and capital markets. Show all your work for the full credit. If you write only answers. NO partial credit You just received a bonus of $5000. a. Calculate the future value of $5000 given that it will be held in the bank for 6 years and cam annual interest rate of 7 percent. b. Recalculate part (a) using a compounding period that is (1) semiannual c. Recalculate parts (a) and (b) using a 10 percent annual interest rate. The duration of a ten-year, 10 percent coupon bond when the interest rate is 10 percent is 7.76 years. What happens to the price of the bond if the interest rate increases to 13 percent? What is the return on a 9 percent coupon bond that initially sells for $1000 and sells for $1, 150 one year later? If a $20,000 face value discount bond maturing in one year is selling for $18,000. then what is its yield to maturity? Which of the following $1,000 face value securities has the highest yield to maturity? A) A 9 percent coupon bond selling for $1,000 B) A 14 percent coupon bond selling for $1, 100 C) A 13 percent coupon bond selling for $1, 050