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A) Suppose, originally yield curve was flat. Now suppose Banks now faces temporary increase in demand for short term credit. How it will affect the

  1. A) Suppose, originally yield curve was flat. Now suppose Banks now faces temporary increase in demand for short term credit. How it will affect the yield curve?

B) Take the current (August / September 2021) interest rates of FDR of different maturities (1 month, 3 month, 6 month, 1 year..) and the same in the last year of a private commercial Bank and draw two different yield curve. What are their shapes? Can you explain implications of such shape?

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