Question
Given the following data on debt U.S. Treasury debt instruments: ( Show all work in a way I can understand better and do it by
Given the following data on debt U.S. Treasury debt instruments: (Show all work in a way I can understand better and do it by hand) Also, I know based on the chegg rule you wont complete all the exercise. Let me know what I can do, should I separate some parts?
1-year note yield = 4.42%7-year note yield = 5.64%
2-year note yield = 4.69%8-year note yield = 5.70%
3-year note yield = 5.02%9-year note yield = 5.86%
4-year note yield = 5.02%10-year note yield = 5.95%
5-year note yield = 5.35%11-year note yield = 5.90%
6-year note yield = 5.50%12-year note yield = 5.99%
And constant premiums of 0, .17%, .41%, .63%, .82%, .98%, 1.12%, 1.22%, 1.30%, 1.37%, 1.42%, 1.45%, 1.47%
a) Calculate the expected market yields for a (1,5,2) path.
b) Calculate the expectations yields for a (3,4,1) path.
c) Calculate the real world yield for a (3,5) path.
d) Calculate the expected preferred habitat yield for a 5-year note purchased at the beginning of year 2.
e) Calculate the expectations yield on a 4-year note purchased at the beginning of year 5.
f) Determine the expectations yield on a 10-year note purchased today.
g) Determine the yield on a 12-year Treasury note purchased today.
h) Describe the yield curve and provide a general interpretation of what implies about the economy.
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