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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Term structure of interest rates The following yield data for a number of highest quality corporate bonds existed at each of the three points in time noted.
|
Time to maturity (years) |
Yield |
||
|
 |
5 years ago |
2 years ago |
Today |
|
1 |
9.1% |
14.6% |
9.3% |
|
3 |
9.2 |
12.8 |
9.8 |
|
5 |
9.3 |
12.2 |
10.9 |
|
10 |
9.5 |
10.9 |
12.6 |
|
15 |
9.4 |
10.7 |
12.7 |
|
20 |
9.3 |
10.5 |
12.9 |
|
30 |
9.4 |
10.5 |
13.5 |
a. On the same set of axes, draw the yield curve at each of the three given times.
b. Label each curve in part a with its general shape (downward-sloping, upward-sloping, flat).
c. Describe the general inflationary and interest rate expectation existing at each of the three times.
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