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8. Drawinga yield curve Given the indicated maturities listed in the following table, assume the following yields for U.S. Treasury securities: Maturity Yield (Years) (%) 1 5.5 5 5.0 10 4.7 20 4.4 30 RATE (Percent) On the following graph, use the blue points (circle symbol) to plot the yield curve implied by these interest rates. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ? 10 9 3.8 8 Yield Curve

8. Drawinga yield curve Given the indicated maturities listed in the following table, assume the following yields for U.S. Treasury securities: Maturity Yield (Years) (%) 1 5.5 5 5.0 10 4.7 20 4.4 30 RATE (Percent) On the following graph, use the blue points (circle symbol) to plot the yield curve implied by these interest rates. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ? 10 9 3.8 8 Yield Curve

MACROECONOMICS
MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter14: The Financial Crisis And The Great Recessio
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8. Drawinga yield curve Given the indicated maturities listed in the following table, assume the following yields for U.S. Treasury securities: Maturity Yield (Years) (%) 1 5.5 5.0 4.7 4.4 3.8 On the following graph, use the blue points (circle symbol) to plot the yield curve implied by these interest rates. INTEREST RATE (Percent) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 10 9 8 2 5 10 20 30 1 0 0 5 10 15 20 MATURITY (Years) 25 30 Yield Curve (?)
Transcribed Image Text:8. Drawinga yield curve Given the indicated maturities listed in the following table, assume the following yields for U.S. Treasury securities: Maturity Yield (Years) (%) 1 5.5 5.0 4.7 4.4 3.8 On the following graph, use the blue points (circle symbol) to plot the yield curve implied by these interest rates. INTEREST RATE (Percent) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 10 9 8 2 5 10 20 30 1 0 0 5 10 15 20 MATURITY (Years) 25 30 Yield Curve (?)
The graph's yield curve represents Based on the yield curve shown, which of the following statements is true? If inflation in the future is expected to increase, the yield curve on U.S. Treasuries is likely to be downward sloping. yield curve. Interest rates on short-term maturities are higher than rates on medium- and long-term maturities. Assume a scenario in which there is no maturity risk premium (MRP = 0), the real risk-free rate is expected to remain constant, and the yield curve for U.S. Treasury securities is likely to be upward sloping for the next 10 years. Is inflation expected to increase, decrease, or stay the same over the next 10 years? Increase Decrease Stay the same
Transcribed Image Text:The graph's yield curve represents Based on the yield curve shown, which of the following statements is true? If inflation in the future is expected to increase, the yield curve on U.S. Treasuries is likely to be downward sloping. yield curve. Interest rates on short-term maturities are higher than rates on medium- and long-term maturities. Assume a scenario in which there is no maturity risk premium (MRP = 0), the real risk-free rate is expected to remain constant, and the yield curve for U.S. Treasury securities is likely to be upward sloping for the next 10 years. Is inflation expected to increase, decrease, or stay the same over the next 10 years? Increase Decrease Stay the same
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