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kindly answer all parts of this questions there are 4 parts of this question a)the correct yield curve accoridng to data b)what type of shield
kindly answer all parts of this questions there are 4 parts of this question a)the correct yield curve accoridng to data b)what type of shield curve is shown c)what information this graph tell you d)based on this yield curve if you needed to borrow ........... i have attached pictures for the clarity please dont answer if you dont know how to solve this is my last attempt have already posted this question before but expert gave wrong anseer so please give accurate ansers i ll give upvote
a. Select a correct yield curve based on these data. 1. Problem 6.01 (Yield Curves) Assume that yields on U.S. Treasury securities were as follows: \begin{tabular}{ll} TERM & RATE \\ \hline 6 months & 4.30% \\ 1 year & 5.45 \\ 2 years & 5.66 \\ 3 years & 5.74 \\ 4 years & 5.83 \\ 5 years & 6.09 \\ 10 years & 6.40 \\ 20 years & 6.56 \\ 30 years & 6.71 \\ \hline \end{tabular} a. Select a correct yield curve based on these data. A of-Chapter Problems - Interest Rat b. What type of yield curve is shown? -Select- C. What information does this graph tell you? -Select- d. Based on this yield curve, if you needed to borrow money for longer than 1 year, would it make sense for you to borrow short term and renew the loan or borrow long term? Explain. I. Even though the borrower reinvests in increasing short-term rates, those rates are still below the long-term rate, but what makes the higher longterm rate attractive is the rollover risk that may possibly occur if the short-term rates go even higher than the long-term rate (and that could be for a long timel). II. Generally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be higher. III. Generally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be lower. IV. Generally, it would make sense to borrow long-term because each year the loan is renewed the interest rate would be lower. V. Differences in yields that may exist between the short-term and long-term cannot be explained by the forces of supply and demand in each market. The correct yield curve is b. What type of yield curve is shown? c. The yield curve is abnormal. The yield curve is upward sloping. The yield curve is flat. The yield curve is downward sloping. The yield curve is inverted. What type of yield curve is shown? What information does this graph tell you? c. What information does this graph tell you? -Select- d. Based on this yield curve, if you needed to borrow money for longer than 1 year, would it make sense for you to borrow short term and borrow long term? Explain. I. Even though the borrower reinvests in increasing short-term rates, those rates are still below the long-term rate, but what m term rate attractive is the rollover risk that may possibly occur if the short-term rates go even higher than the long-term rate for a long time!). II. Generally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be highe III. Generally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be lower IV. Generally, it would make sense to borrow long-term because each year the loan is renewed the interest rate would be lower. V. Differences in yields that may exist between the short-term and long-term cannot be explained by the forces of supply and c marketStep by Step Solution
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