Question
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.
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 TBill | 14.65% | 14.12% |
182 Day TBill | 15.10% | 15.31% |
364 Day TBill | 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? Your explanation should be practical and as detailed as possible but not exceeding 800 words
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started