Assuming that the expectation theory is the correct theory of the term structure, calculate the interest rates in the terms structure for maturities of on to five years, and plot the resulting yield curves for the following series of one-year interest rates over the next five year. how would your yield curves change if people preffered shorter-term bonds over longer-term bonds? i) 5%, 4%,4%, 4%, 4%

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Assuming that the expectation theory is the correct theory of the term structure, calculate the interest rates in the terms structure for maturities of on to five years, and plot the resulting yield curves for the following series of one-year interest rates over the next five year. how would your yield curves change if people preffered shorter-term bonds over longer-term bonds?

i) 5%, 4%,4%, 4%, 4%

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