Part Three - Problem: show all work Answer all four questions (4 points each; 20 points total) 1. create in excel (and attach to an email) the yield curve for one of the given dates in June 2020. Provide a summary statement interpreting this yield curve. (SEE Question 5 to complete this excel program and before closing and saving.) 2. The FED is concemed with interest rate levels and the possibility of inflation or deflation. Given your chosen information for June 2020 data, calculate the two annual forward rates using the information provided below. 3. Given the Spot rate and your two calculated forward rates, calculate the expected inflation premiums over the next three years. Assume the RR (real rate) -2%. 4. Given your numbers, should the FED be concerned with inflation (deflation) in the near term (first year), interim period (second year), or longer term (third year) period observed and calculated? 5. Using Excel, draw the two yield curves (if possible on the same graph) reflective of 2010 and 2012 - label each. What do you observe, how has the yield curve changed since 2010 to 2012 to 2020? What might the change imply? September 2010 Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr 09/29/10 0.12 0.15 0 20 0.27 0.44 0.67 1.28 1.91 2.52 3.38 3.69 January 2012 Date 1 mo 3 mo 01/13/12 0.02 0.03 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 y 30 yr 0.10 0.24 034 0.80 1.32 189 2.59 2.91 0.06 Focus td Statel June 2020 FIN 610 First Exam - each student will use the assigned daily data (see below) to answer the questions above => for the yield curve, the expected forward rates, and the estimate of expected inflation premium from the list below. Date 1 Mo 2 Mo 3 Mo 6 Mo 1. 2. 3. 20 5 Y. 7Y 10 YT 30 Y Yr 06/02/20 0.12 0.13 0.15 0.18 0.17 0.17 0.20 0.32 0.52 0.68 1.24 1.48 06/03/20 0.12 0.14 0.16 0.19 0.17 0.19 0.26 0.38 0.59 0.77 1.32 1.56 06/04/20 0.13 0.15 0.15 0.18 0.17 0.19 0.26 0.40 0.63 0.82 1.38 1.61 06/05/20 0.13 0.14 0.15 0.18 0.18 0.22 0.29 0.47 0.71 0.91 1.46 1.68 06/08/20 0.15 0.15 0.17 0.19 0.19 0.22 0.29 0.45 0.69 0.88 1.43 1,65 06/09/20 0.14 0.17 0.19 0.19 0.19 0.20 0.25 0.40 0.65 0.84 1.37 1.59 06/10/20 0.13 0.16 0.17 0.19 0.18 0.17 0.22 0.33 0.56 0.75 1.31 1.53 06/11/20 0.14 0.16 0.17 0.18 0.19 0.19 0.22 0.32 0.51 0.66 1.19 1.41 06/12/20 0.14 0.15 0.16 0.18 0.18 0.19 0.22 0.33 0.54 0.71 1.24 1.45 Part Three - Problem: show all work Answer all four questions (4 points each; 20 points total) 1. create in excel (and attach to an email) the yield curve for one of the given dates in June 2020. Provide a summary statement interpreting this yield curve. (SEE Question 5 to complete this excel program and before closing and saving.) 2. The FED is concemed with interest rate levels and the possibility of inflation or deflation. Given your chosen information for June 2020 data, calculate the two annual forward rates using the information provided below. 3. Given the Spot rate and your two calculated forward rates, calculate the expected inflation premiums over the next three years. Assume the RR (real rate) -2%. 4. Given your numbers, should the FED be concerned with inflation (deflation) in the near term (first year), interim period (second year), or longer term (third year) period observed and calculated? 5. Using Excel, draw the two yield curves (if possible on the same graph) reflective of 2010 and 2012 - label each. What do you observe, how has the yield curve changed since 2010 to 2012 to 2020? What might the change imply? September 2010 Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr 09/29/10 0.12 0.15 0 20 0.27 0.44 0.67 1.28 1.91 2.52 3.38 3.69 January 2012 Date 1 mo 3 mo 01/13/12 0.02 0.03 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 y 30 yr 0.10 0.24 034 0.80 1.32 189 2.59 2.91 0.06 Focus td Statel June 2020 FIN 610 First Exam - each student will use the assigned daily data (see below) to answer the questions above => for the yield curve, the expected forward rates, and the estimate of expected inflation premium from the list below. Date 1 Mo 2 Mo 3 Mo 6 Mo 1. 2. 3. 20 5 Y. 7Y 10 YT 30 Y Yr 06/02/20 0.12 0.13 0.15 0.18 0.17 0.17 0.20 0.32 0.52 0.68 1.24 1.48 06/03/20 0.12 0.14 0.16 0.19 0.17 0.19 0.26 0.38 0.59 0.77 1.32 1.56 06/04/20 0.13 0.15 0.15 0.18 0.17 0.19 0.26 0.40 0.63 0.82 1.38 1.61 06/05/20 0.13 0.14 0.15 0.18 0.18 0.22 0.29 0.47 0.71 0.91 1.46 1.68 06/08/20 0.15 0.15 0.17 0.19 0.19 0.22 0.29 0.45 0.69 0.88 1.43 1,65 06/09/20 0.14 0.17 0.19 0.19 0.19 0.20 0.25 0.40 0.65 0.84 1.37 1.59 06/10/20 0.13 0.16 0.17 0.19 0.18 0.17 0.22 0.33 0.56 0.75 1.31 1.53 06/11/20 0.14 0.16 0.17 0.18 0.19 0.19 0.22 0.32 0.51 0.66 1.19 1.41 06/12/20 0.14 0.15 0.16 0.18 0.18 0.19 0.22 0.33 0.54 0.71 1.24 1.45