Go to the markets section of www.bloomberg.com and click on U.S. Bonds under “Rates and Bonds.” Next click on “U.S.” and review the “Treasury Yields.”
a. How does the yield on Treasury securities with longer maturities differ from the yield on Treasury securities with shorter yields? Why do you think the yields vary with the maturity?
b. What is the yield on a three-month Treasury security? On a six-month Treasury security? If you needed funds in six months, you could invest in two consecutive three-month Treasury securities or in one six-month Treasury security. Which strategy would you choose? Why?