A graphical plot of interest rates on government debt securities (Treasury Bills) of varying maturities can have one of three shapes; increasing, decreasing, or flat. The data below show the interest rates on the government of Ghana debt securities (Treasury Bills) on two separate dates; 31st January 2019 and 4th May 2020. 31 January 2019 4th May 2020 91 Day T’Bill 14.65% 14.12% 182 Day T’Bill 15.10% 15.31% 364 Day T’Bill 17.38% 16.92% Required: i) Graph separate yield curves for the two dates. ii) On both dates, the yield curve appears to be upward sloping. What reasons would you assign for these upward sloping shapes of the yield curve in Ghana on these separate days?

A graphical plot of interest rates on government debt securities (Treasury Bills) of varying maturities can have one of three shapes; increasing, decreasing, or flat. The data below show the interest rates on the government of Ghana debt securities (Treasury Bills) on two separate dates; 31st January 2019 and 4th May 2020. 31 January 2019 4th May 2020 91 Day T’Bill 14.65% 14.12% 182 Day T’Bill 15.10% 15.31% 364 Day T’Bill 17.38% 16.92% Required: i) Graph separate yield curves for the two dates. ii) On both dates, the yield curve appears to be upward sloping. What reasons would you assign for these upward sloping shapes of the yield curve in Ghana on these separate days?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 2EP

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A graphical plot of interest rates on government debt securities (Treasury Bills) of varying maturities can have one of three shapes; increasing, decreasing, or flat. The data below show the interest rates on the government of Ghana debt securities (Treasury Bills) on two separate dates; 31st January 2019 and 4th May 2020.31 January 2019 4th May 202091 Day T’Bill 14.65% 14.12%182 Day T’Bill 15.10% 15.31%364 Day T’Bill 17.38% 16.92%Required: ii) On both dates, the yield curve appears to be upward sloping. What reasons would you assign for these upward sloping shapes of the yield curve in Ghana on these separate days? Your explanation should be practical and as detailed as possible but not exceeding 800 words.
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