A. Using yield curve from Scenario 4, which of the three curves: par curve, spot curve and forward curve is the lowest before year 6? How would you expect the forward curve to change at year 7 relative to the spot curve (i.e. lie above or below). Please Scenario 1 Scenario 2 3 2 2 1 1 0 0 1 2 -1 - 2 - 3 2 T 2 2 T 4 T 9 T 9 3 7 co 10 1 2 3 4 7 8 10 5 6 Maturity 5 6 Maturity Scenario 3 Scenario 4 -.1 4 - 2 2 - 3 0 -4 - 2 T T T T T T 9 2 3 4 7 8 -O 10 1 2 3 4 7 - co 9 10 5 6 Maturity 5 6 Maturity explain your answers. [2 marks] B. Based on the yield curve under Scenario 3, if it also included a positive liquidity premium, what would you expect this yield curve to look like compared to the same yield curve without a positive liquidity premium? Please explain your answers. [3 marks] A. Using yield curve from Scenario 4, which of the three curves: par curve, spot curve and forward curve is the lowest before year 6? How would you expect the forward curve to change at year 7 relative to the spot curve (i.e. lie above or below). Please Scenario 1 Scenario 2 3 2 2 1 1 0 0 1 2 -1 - 2 - 3 2 T 2 2 T 4 T 9 T 9 3 7 co 10 1 2 3 4 7 8 10 5 6 Maturity 5 6 Maturity Scenario 3 Scenario 4 -.1 4 - 2 2 - 3 0 -4 - 2 T T T T T T 9 2 3 4 7 8 -O 10 1 2 3 4 7 - co 9 10 5 6 Maturity 5 6 Maturity explain your answers. [2 marks] B. Based on the yield curve under Scenario 3, if it also included a positive liquidity premium, what would you expect this yield curve to look like compared to the same yield curve without a positive liquidity premium? Please explain your answers. [3 marks]