Response to the following problem:
Consider the following yields to maturity:
|
Years to Maturity
|
Yield to Maturity
|
|
1
|
3.0%
|
|
2
|
3.5%
|
|
3
|
3.9%
|
|
4
|
4.4%
|
|
5
|
4.8%
|
|
6
|
5.2%
|
a. Graph the yield to maturity against the time to maturity.
b. Is this yield curve consistent with any of the yield curve theories? Explain.