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Paye 3 UIDU U.S. Treasury yield curve 3.0 01-2017 01-2018 2.75%. 243% ... 2.58%.. 2.38%...2:43 Annual Percentage Rate 0.83% 0.61% 0.51% 3-mo 6-mo 1-yr 2-yr

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Paye 3 UIDU U.S. Treasury yield curve 3.0 01-2017 01-2018 2.75%. 243% ... 2.58%.. 2.38%...2:43 Annual Percentage Rate 0.83% 0.61% 0.51% 3-mo 6-mo 1-yr 2-yr Maturity 5 yr 10-yr 20-yr 30-yr Source: Federal Reserve Bank of St. Louis FRED II a. (2 pts) Refer to the yield curves above. Suppose the term premium investors required to purchase a 2-year security in January 2017 was 0.1%. What was the expected interest rate on a one-year Treasury security 1-year in the future? b. (2 pts) Refer to the yield on the 30-year security in both periods. Assume the Fisher Hypothesis is correct. How did the 30-year average expected inflation rate change over the course of 2017

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