Question 35 (2.5 points) Assume that a one-year bond currently pays 5% interest. It's expected that it will pay 4.5% next year and 4% the following year. The two-year term premium is 0.2% while the three-year term premium is 0.35%. What is the interest rate on a two-year bond according to the liquidity premium theory? O4.5% 4.95% 4.975% O4.75% Question 39 (2.5 points) Assume that a one-year bond currently pays 5% interest. It's expected that it will pay 4.5% next year and 4% the following year. The two-year term premium is 0.2% while the three-year term premium is 0.35%. What is the interest rate on a 3 year bond according to the liquidity premium theory? O4.87% O4% O 4.5% 4.85% Question 10 (2.5 points) Assume that in 2019 nominal interest rate on a one year bond is 2% and in 2020 it is expected to be 4% and the risk premium on the bond is 0.03%. Based on the "expectations theory" in 2019 interest rate on a two year bond should be, 4.03% O4% O 3% 06% Question 15 (2.5 points) If the interest rate on a 10 year corporate bond issued by General Motors is 9% and the interest rate on a 10 year U.S. Treasury bonds 6%, the default risk premium on General Motors bond is O 3% 5% 15% O2% Question 16 (2.5 points) A three-month Treasury bill has a yield of 3% while the yield on a ten-year Treasury bond is 7%. What is the risk premium of the typical A-rated ten-year corporate bond with a yield of 9.6%? 4% 2.6% 6.3% 1.17%