Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Describe the Treasury yield curve by using the "Illustrative Treasury Yield Curves" [Figure 6-5] in your text, Fundamentals of Financial Management.

439_Treasury yield curve.jpg

 

US Treasury Bonds

Maturity

Yield

Yesterday

Last Week

Last Month

3 Month

1.77

1.75

1.79

1.78

6 Month

2.01

2

2.07

1.91

2 Year

2.47

2.43

2.65

2.37

3 Year

2.39

2.36

2.58

2.34

5 Year

3.18

3.19

3.35

3.17

10 Year

3.88

3.9

4.00

3.91

30 Year

4.45

4.49

4.55

4.62

The above information shows that the US treasury yield curve as on July 8th 2008, the US Treasury bonds are arranged in the order of their maturity in X axis & yield rates are arranged in Y axis. See that the longer the maturity, the higher the yield. The curve is expressing the relationship between bond yields & maturity, it is called yield curve. We can see from the yield curve in the above figure that bonds with three months to maturity offered a yield of about 1.77%; those with thirty years of maturity offered a yield of just over 4.62%.

Using one of the items below, construct your own yield curve [similar to Figure 6-5]. The maturities must be 1, 5, 10, 20, & 30 years as used in Figure 6-5; however, the values will vary depending on which item you select. No more than 3 students may select the same item or prepare a yield curve on a similar company. The information you need to make your yield curve can be found on the following Web sites.

Construct your yield curve using Microsoft PowerPoint and post a single slide as an attachment to this. In your posting, describe what you learned about predicting interest rates using yield curves. How did your institution or company differ from expectations prior to seeing the yield curve? What does this information mean to you?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918775

Have any Question? 


Related Questions in Basic Finance

Abc corp has a target capital structure of 60 percent

ABC corp has a target capital structure of 60 percent common stock, 5 percent preferred stock and a 35 percent debt. It's cost of common stock is 10% , the cost of preferred is 5% and the pretax cost of debt is 7%. The r ...

Bruce wayne borrowed 14 30000 for investment purposes on

Bruce Wayne borrowed $14 300.00 for investment purposes on May 19, on a demand note providing for a variable rate of interest and payment of any accrued interest on December 31. He paid $1,300.00 on June 28, $1,450 on Se ...

1 from the sites front page access ibm research it changes

1. From the site's front page, access "IBM Research" (it changes from year to year, but it is under the "About IBM" tab at the bottom of the page). Choose three projects from the list and describe what the projects are a ...

1 which type of error do researchers usually regard as more

1. Which type of error do researchers usually regard as more serious? Why? 2. Explain what it means if a researcher sets the alpha level for a statistical test at .05. 3. What does it mean if the difference between two m ...

1 oil and gas companies must disclose quantity estimates

1. Oil and gas companies must disclose quantity estimates for proved oil and gas reserves and the major factors causing changes in these resource estimates. Briefly indicate why this disclosure can be significant. 2. For ...

1 a local firm has debt worth 200000 with a yield of 9 and

1. A local firm has debt worth $200,000, with a yield of 9%, and equity worth $300,000. It is growing at a 5% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension ...

A using the table of critical values of t in appendix a-2

a. Using the table of critical values of t in Appendix A-2, find the critical value of t for an experiment in which there are 28 participants, using an alpha level of .05 for a one-tailed test b. Find the critical value ...

You bought the contract during the day at 2010 and had to

You bought the contract during the day at 2010, and had to put up initial margin of $25,000. The maintenance margin is $12,500. At what contract price will you get a margin call? Explain.

Go to the home page of cisco systems inc httpwwwciscocom

Go to the home page of Cisco Systems, Inc. (http://www.cisco.com) and link to its financial reports page. Download the most recent annual report and observe the capital investment and dividend policies of Cisco Systems. ...

1 distinguish between theory model and hypothesis2 describe

1. Distinguish between theory, model, and hypothesis. 2. Describe how researchers use induction versus deduction to generate research hypotheses. 3. Describe the process by which hypotheses are developed and tested.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen