(i) After a long period of low interest rates, central banks are expected to begin increasing their country's interest rates. a. Explain in your own words how an increased cash rate by the Reserve Bank of Australia can cause the yield curve flatten. Your answer must include a description of a yield curve. (Worth 2 marks) b. Describe in your own words a trading strategy that an active bond fund manager could adopt if they expected the yield curve to flatten over the next few months. (Worth 2 marks) c. There are very few issues of bonds that have a term of 30 years. Describe in your own words the type of investor that would prefer to invest in 30 -year bonds instead of shorter-term bonds. (Worth 2 marks) (ii) The true price of bonds is based on the yields on zero-coupon bond (ZCB). a. In your own words explain why and how the price and yield of a two-year ZCB will be different from the price of a two-year bond that has a coupon rate of 3% per annum and is currently trading at a yield of 2.5% per annum. (Worth 2 marks) b. Use the ZCB yields in the table below to calculate the price of a two-year non-callable Treasury bond that has a face value of $100 and pays coupons semi-annually at a coupon rate of 1.75% per annum. Show how you calculated your answer. (Worth 2 marks)