Question 2 (30 points) A risk-free asset currently yields 2%. Expected return and beta of Stock ABC are 10% and 1.05 respectively. 2a) Explain in the context of coupon interest and yield to maturity why some bonds are selling at a premium over par value while other bonds are selling at a discount. a (15 points) 2b) Which three components determine the shape of the term structure of interest rates? Explain. (15 points)