biems 6-1 YIELD CURVES Assume that yields on US. Trasury searities were as follows 7 a. Phota yield curve baped on these data: b. What type of yield curve is shown? c. What intorination does this graph tell yuu? d. Bared an thes yield curver if you perded to borrow money for longer than I zear would it make sense for you to bertow short term and nenw the fo tha or borrow lans terme Euphaint Fol wirg estimates of cument inteirst rote promiume - inflatron promium in 325 - 1 yeizity premiea ing of - Nlaturity rion parminum tros 3. DEFAULT RISK PREMIUM The real risk-free rate, r', is 1.7\%. Inflation is expected to average 1.5% a year for the next 4 years. after which time inflation is expected to average 4.8 a y year. Assume that there is no maturity risk premium. An l1-year corporate bond has a yield of 8.7%, which includes a liquidity premium of 0.3. What is its default risk premium