Assuming the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one to five years and use them to plot the resulting yield curves for the following paths of one-year interest rates over the next five years. 8- a. 4%, 5%, 6%, 5%, 4% 7- b. 4%, 3%, 2%, 3%, 4% 6- Using the multipoint curve drawing tool, plot the interest rate (calculated using the data above) for each of the five terms to maturity for each given path. Label your curves appropriately. 5- Carefully follow the instructions above, and only draw the required objects. How would your yield curves change if people preferred shorter-term bonds over longer-term bonds? Yield to Maturity a. It would b. It would 3- not change 2- experience a parallel shift up experience a parallel shift down 1- become more upward-sloping become more downward-sloping 0 0 1 5 6 2 3 4 Years to Maturity