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Recently, one-year U.S. Treasury notes have been priced @ 0.08%, two-year @ 0.23%, three-year @ 0.45%, four-year @ 0.62% and five-year @ 0.81%. How and

Recently, one-year U.S. Treasury notes have been priced @ 0.08%, two-year @ 0.23%, three-year @ 0.45%, four-year @ 0.62% and five-year @ 0.81%. How and why would the current shape of the yield curve change if investors believe interest rates would be higher than forecast by the forward yield? What term securities would investors purchase and sell as a result of a forecast above the forward rate derived?

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