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If the yield curve is flat at 2% and then rates rise in parallel (each maturity by the same amount) by 100 bps...which discount factor
If the yield curve is flat at 2% and then rates rise in parallel (each maturity by the same amount) by 100 bps...which discount factor (from 1-30 years) will be affected the most? Why? What does a positive yield curve suggest about rates in the future relative to today? What does a flat yield curve suggest? What does an inverted curve suggest? Setup a simple spreadsheet for a bond with annual payments of 5%. Calculate a price for the bond for the following: 1) A 10 year maturity with a yield of 3% 2) A 30 year maturity with a yield of 3% 3) A 30 year maturity with a yield of 7%
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