1. Evaluate the following statement: 'credit rating agencies and saver households are just as much to blame as investment banks when investment banks go bankrupt during the downswing phase of a financial cycle based on securitized assets’
2. Currently, 3-year Treasury securities yield 5.4%, 7-year Treasury securities yield 5.8%, and 10-year Treasury securities yield 6.2%. If the expectations theory is correct, what does the market expect will be the yield on 3-year Treasury securities seven years from today?