On Monday, September 26, 2022, the US Treasury markets close at the following rates... 2-month: 3.14% 3-month: 3.39% 6-month: 3.95% 1-year: 4.17% 2-year: 4.27% Just a quick note: Recall that you are using DECIMALS in the calculations to answer the questions below, NOT percent. To convert from percent to decimals, you simply shift the decimal 2 places to the left. So, 3.14% becomes 0.0314-the decimal to the right of 3 in the percent value is now moved 2 spots to the left. If you have a value less than 1%, which is common for the liquidity premia on bonds, you still do the same thing-move the decimal 2 spots to the left. So, 0.1% becomes 0.001 in decimal form, and 0.05% becomes 0.0005 in decimal form. This sometimes throws people off when the value is below 1%, but just remember you're always doing the same thing-moving the decimal 2 spots to the left. 1. Given the 3-month rate and the 2-month rate above, what is the 1-month rate the market expects to prevail 2 months after September 26? Assume the liquidity premium is 0.01% (or 0.0001 in decimals). (Note: 2 months is 0.167 of a year.) 2. Given the 6-month rate and the 3-month rate above, what is the 3-month rate the market expects to prevail 3 months after September 26? Assume the liquidity premium is 0.02% (or 0.0002 in decimals). 3. Given the 1-year rate and the 6-month rate above, what is the 6-month rate the market expects to prevail 6 months after September 26? Assume the liquidity premium is 0.05% (or 0.0005 in decimals). 4. Given the 2-year rate and the 1-year rate above, what is the 1-year rate the market expects to prevail 1 year after September 26? Assume the liquidity premium is 0.1% (or 0.001 in decimals-note only 2 zeroes here). 5. The Fed was clear in the press conference following its FOMC meeting around September 20 that it expects to continue to raise interest rates aggressively the rest of 2022. There are 2 meetings left this year-November 1-2 and December 13-14. Currently the Fed has its target rate at about 3.12%. If it continues the pace of the past 3 months, it will raise rates by 0.5% to 0.75% at each of these meetings, or 1% to 1.5% total. Using your answer to #1 and #2 above, had the market priced both of these interest rate increases in already on September 26? (Note that the December 13-14 meeting is was closer to 3 months away than 2 months away on September 26.) Briefly explain how you know this (1-2 sentences).