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QUESTION 4 1 points Consider the effect of an un-anticipated 1 basis point increase in the 5 year bond rate (x) at time t, which

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QUESTION 4 1 points Consider the effect of an un-anticipated 1 basis point increase in the 5 year bond rate (x) at time t, which persists at t+1, t+2, . .. . Assuming the 2 year bond rate (z ) does not change, and no other shocks occur at any horizon, what is the most appropriate inference regarding the change in the 10 year bond rate (y) one month (f+1) after impact? O a. The 10 year bond rate increases by 1.515 one month after impact. O b. The 10 year bond rate decreases by 0.0175 one month after impact. O c. The change in the 10 year bond rate one month after impact is between 1.4453 and 1.5847 with 95% confidence. O d. The change in the 10 year bond rate one month after impact is contained in a 95% confidence interval centred at -0.0175

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