One of your colleagues is looking at the yield curve expressed by the information below and asks for an explanation as to why it has the current shape. Describe the shape of the term structure presented in the table below. Explain the shape using the two forms of the biased expectations theory your answer should define the two forms, and explain why they are referred to as biased.

Maturity (T) Years Spot Rate (%) r(1) 1(2) r(3) r(4) I(5) r(6) 1(7) r(8) r(9) 2.4711 2.4527 2.4745 2.4518 2.3187 2.2438 2.2403 2.3354 2.4373 Term Structure 3 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2.2 2.1 r(4) r(5) r(6) r(7) r(8) r(9) r(10) Year/Term Spot Rate % 2 r(1) r(2) r(3) (10) 2.8747