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1. Yield curves The following yields on U.S. Treasury securities were taken from a recent financial publication: (50 points) Term Rate 1 year 3% 2

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1. Yield curves The following yields on U.S. Treasury securities were taken from a recent financial publication: (50 points) Term Rate 1 year 3% 2 years 4 3 years 5 4 years 6 6 5 years 7 10 years 8 20 years 9 30 years 10 1. Plot or explain the yield curve based on these data. 2. What type of yield curve is shown? 3. What information does this graph tell you? 4. Based on this yield curve, if you needed to borrow money for longer than one year, would it make sense for you to borrow short term and renew the loan or borrow long term

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