The yield to maturity on a 1-year bond purchased for $980 with a maturity value of $1100 is:

Question 1 options:

a)	10.05%
b)	13.50%
c)	12.24%
d)	14.23%

A flat term structure implies that investors expect future short-term interest rates to:

Question 2 options:

a)	decrease.
b)	increase.
c)	be the same as the current rate.
d)	none of the options given.