(Yield curve) If yields on Treasury securities were currently as follows: a. Show the yield curve for the Treasury securities. b. Explain this yield curve using the unbiased expectations theory and the liquidity preference theory. .... a. vrcn or the following graphs shows uie yielu curve for the reasury securues! (Select the best choice below.) . a OB. 5- 4.5- 4- 3.5- 3- a a Interest rate 2.57 Interest rate 5- 4.5 4- 3.5- 3- 2.5 2 1.5- 1 0.5- 0+ 0 2- 1.5- 1 0.5- 0+ 0 5 25 30 5 25 30 10 15 20 Years to maturity 10 15 20 Years to maturity c. OD. a a Interest rate + 5- 4.5- 4- 3.5 3- 2.5- 2 1.5- 5 4.5 4- 3.5 3- 2.57 5 27 1.5 1 0,5 0.5- 0+ 0 0- 0 5 25 30 5 25 30 10 15 20 Years to maturity 10 15 20 Years to maturity b. Explain this yield curve using the unbiased expectations theory and the liquidity preference theory. buys into the idea that proposes that the rise in the yield curve over the next five years is based on expectations by investors that prevailing interest rates in the market will rise. investors have a preference toward more liquid investments, and that borrowers offer higher rates for longer-term investments as a stimulus for longer, more illiquid investment. (Select from the drop-down menus.) D Data lable (Click on the following icon 2 in order to copy its contents into a spreadsheet.) TERM YIELD 6 months 1.2% 1 year 1.9% 2 years 2.4% 3 years 2.9% 4 years 3.2% 5 years 3.4% 10 years 4.0% 15 years 4.5% 20 years 4.8% 30 years 4.9% Print Done