1.what theory most identifies with the term structure of interest
1.What theory most identifies with the term structure of interest rates? And, why?
2.What is evidence that does not support an efficient market hypothesis?
3.What is the risk structure of interest rates? And, what are the three major components that are included?
4.Yearly rates are 4%, 5%, 6%, 7%, and 8% for the next five years. Please compute and explain the expected interest rate for both the three and four-year bonds if we show the liquidity premiums to be 1.25%, 1%, .75%, .5%, and 0%. (Show your work/calculations/formulas.)
All 4 response should be at least 200 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.