Question 2) The YTM for bonds (see Columns F to Column O) and liquidity premiums Question 2 (Column P to Column Y ) are given for terms to maturity of 1 to 10 years. This question refers to formulas 2 and 3 in chapter 6. Calculate: The expected one year interest rates under the expectations theory You need to calculate the expected one year interest rates for year 1 to 10 under both the expectations Calculate: The expected one year interest rates under the liquidity premium theory. and the liquidity premium theories. These would be the i1 and ie variables in equations 2 and 3 . F44 to Calculate: Explain the differences under the two theories. 044 are the yield to maturities for bonds with 1 to 10 years left to maturity. These are the int variables Display: Format cells to create tables/charts with given data and answers in NOTE: For questions 3 and 4 you will display variables using 132 rows of equations 2 and 3. P44 to Y44 are the liquidity premiums for 1 to 10 years and are the Int variables in observations ( 11 years 12 months=132 observations.) Column AB has the equation 3. month and year for the observations in columns AC through AG. You will use the rows that correspond with January of your start year, through December of your end year (Column Z and Column AA.)