Given the following data on U.S. Agency debt instruments:

1-year note yield = 3.42% 7-year note yield = 4.64%

2-year note yield = 3.69% 8-year note yield = 4.70%

3-year note yield = 4.02% 9-year note yield = 4.86%

4-year note yield = 4.02% 10-year note yield = 4.95%

5-year note yield = 4.35% 11-year note yield = 4.90%

6-year note yield = 4.50% 12-year note yield = 4.99%

And constant premiums of 0, .17%, .41%, .63%, .82%, .98%, 1.12%, 1.22%, 1.30%, 1.37%, 1.42%, 1.45%, 1.47%

(a) Calculate the expected liquidity premium yields for a (1,5,2) path.

(b) Calculate the expectations yields for a (3,4,1) path.

(c) Calculate the real world yield for a (3,5) path.

(d) Calculate the expected pure expectations yield for a 3-year note purchased at the beginning of year 5.

(e) Calculate the expected preferred habitat yield on a 6-year note purchased at the beginning of year 3.

(f) Determine the expectations yield on a 10-year note purchased today.

(g) Determine the market yield on a 12-year note purchased today.

(h) Describe the yield curve and provide a general interpretation of what implies about the economy.