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a. Pick the month you 1latere born. Draw the yield curye for that month in 2008 and 2009. Also. draw the yield curye for the

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a. Pick the month you 1latere born. Draw the yield curye for that month in 2008 and 2009. Also. draw the yield curye for the month falling exactly in the middle. {For instance, if you were born in April. draw the yield curyes for April 2008, October 2003 and April 2009.} (Marks: 2] b. What should be the shape of the yield curye under normal circumstances? Why? (Marks: 2] c. Compare the shapes of the three yield curyes that you haye drawn. From the yield curyes. can you infer anything about the market's expectation about the future of Australian economy? (Marks: 3] d. What is the yield on 2year bond in January 2008? Under the expectations theory, what interest rate do inyestors expect on a 1year bond next year (i.e., January 2009}? Using the same method calculate the expected interest rates on 1*year bonds for all the months of 2009. (Marks: 1]

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