Problem
1. You observe a yield curve which slopes upward for maturities up to two years and then slopes gently downward levelling off at 10 years and beyond. What might this tell you about market expectations of future interest rate developments. Make explicit any assumptions you have to make.
2. What useful forecasting information might there be in (a) company profit announcements and (b) corporate-government bond spreads. Explain how you might go about trying to extract that information.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.