Question 3 (2 marks) Short-term (one-year) interest rates over the next 3 years are 3.0%, 3.5%, 4.0%. A liquidity premium of 15 basis points is required for each year of a bond's maturity. Assume the liquidity premium theory of the term structure holds. What is the interest rate on a 3-year bond? Question 4 (1 marks) Short-term (one-year) interest rates over the next 3 years are 3.0%, 3.0%, and 3.0%. In other words, short-term interest rates are expected to stay near their current level (3%). A liquidity premium of 15 basis points is required for each year of a bond's maturity. Assume the liquidity premium theory of the term structure holds. What is the shape of the yield curve - flat, with upward slope, or with downward slope? I Question 5 (5 marks) What monetary and macroprudential policy tools has the Reserve Bank of New Zealand used in response to the COVID-19 pandemic to prevent an economic and financial crisis? Explain how these tools were used in response to COVID-19. (word limit 250 words) Question 6 (1 marks) A 10-percent coupon bond with face value $6,000 is selling for $5,000. Calculate the current yield of this bond