please answer my question

Your employer (a bank) has decided to offer ve-year loans to its small business customers. You have been presented the task of determining what the appropriate minimum interest rate should be for the most creditworthy customer. The decision to select a particular xed rate for the loans depends on our forecast of the interest rates and our internal efciency in managing the loan. This requires compensation for the costs of making the loan plus prot. You are to use the most recent ve-year Vietnamese bond as the basis for determining the minimum interest rate on the small business fixed-rate loans. Your supervisor indicates that the bank needs to charge two percentage points more than the expected interest rate on Vietnamese government bonds for these loans. In addition, the bank has estimated the term premium to be 0.9%. Given this information, and the fact that you know you will need to defend your recommendation. you start to analyze current interest rates as follows: 1. Access local or Internet articles that describe theories about the form of a yield curve. 2. Obtain current information on the Vietnamese Yield Curve. 3. Plot the current Vietnamese Yield lCiurve and interpret its shape using a. The Expectations Hypothesis b. The Segmented Markets Theory c. The Preferred Habitat 3| Liquidity Preference Theories. d. Which theory (a, b, or 0) do you think best describes the curve? 4. Given the information in responses 1, 2, 3 above, use the expectations hypothesis to calculate and predict interest rates as follows: a. If the one-year interest rate is expected to be the same as the yield curve over the next three years, what interest rate is expected on a taroyear bond one year from now? b. What interest rate is expected on a three-year bond one year from now? c. What relationship do you nd between interest rates and maturity? d. If investors attach term premiums of 0.0025, 0.00?5 and 0.0085 to the one-, two- and three- year bonds: i. What would be the interest rate on a two-year security? ii. What would be the interest rate on a three-year security? iii. What is the forward rate for one-year Vietnamese bonds one year from now? 5. After describing the current yield curve and forecasting interest rates using both the expectations and preferred habitat and liquidity premium methods above, a. What is your recommended minimum interest rate for the ve-year fixed rate loans? b. How would this rate be adjusted for customers that have some credit risk