D. Based on the yield curve of U.S. Treasuries on 19th January, 2021, answer the questions below. % Yields 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Yield Curve for U.S. Treasuries on 19th January 2021 1 Mo 2 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr (1) What is the market predicting about the movement of future short-term interest rates? [6 marks] (2) What might the yield curve indicate about the market's predictions concerning the inflation rate in the future? [6 marks] (3) According to the liquidity premium theory, why do longer-term U.S. Treasury Securities tend to have higher yields? [6 marks]