c. Constructing a graph of the yield curve Years to Maturity 1 2 3 4 5 10 20 30 Yield 5.32% 5.37% 5.55% 5.62% 5.53% 5.64% 6.24% 5.84% d. Calculating yields and then constructing a new yield curve graph that shows both the Treasury and the corporate bonds Formulas Corporate yield Spread LP DRP Years 1 2 2 3 4 5 10 20 30 Treasury yield 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Years 1 2 3 4 4 5 10 20 30 Treasury Corporate yield yield 0.00% #NIA 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A Spread #NJA #N/A #N/A #N/A #N/A #/ #N/A #N/A #N/A LP #NIA #N/A #N/A #N/A #N/A #N/A #NIA #N/A DRP #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 1. Calculating the rates using geometric averages (1) Calculating the 1-year rate, 1 year from now 2) Calculating the 5-year rate, 5 years from now (3) Calculating the 10-year rate, 10 years from now 34) Calculating the 10-year rate, 20 years from now Formulas #N/A #N/A #N/A #N/A c. Constructing a graph of the yield curve Years to Maturity 1 2 3 4 5 10 20 30 Yield 5.32% 5.37% 5.55% 5.62% 5.53% 5.64% 6.24% 5.84% d. Calculating yields and then constructing a new yield curve graph that shows both the Treasury and the corporate bonds Formulas Corporate yield Spread LP DRP Years 1 2 2 3 4 5 10 20 30 Treasury yield 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Years 1 2 3 4 4 5 10 20 30 Treasury Corporate yield yield 0.00% #NIA 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A 0.00% #N/A Spread #NJA #N/A #N/A #N/A #N/A #/ #N/A #N/A #N/A LP #NIA #N/A #N/A #N/A #N/A #N/A #NIA #N/A DRP #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A 1. Calculating the rates using geometric averages (1) Calculating the 1-year rate, 1 year from now 2) Calculating the 5-year rate, 5 years from now (3) Calculating the 10-year rate, 10 years from now 34) Calculating the 10-year rate, 20 years from now Formulas #N/A #N/A #N/A #N/A