Question 2 (Total 5 marks) You are a trading analyst at a financial planning firm in Sydney. In August 2021, you noticed the following
Question 2 (Total 5 marks) You are a trading analyst at a financial planning firm in Sydney. In August 2021, you noticed the following data in the bond market. (a). While the yield on a 3-year bond increased over time, the yield on a 1-year bond and a 2-year bond decreases a bit. What does it imply to the yield on a 1-year bond in 2023? (2.5 marks, Max 50 word limit) (b). You believe that investors with different trading strategies and risk preference will stay in different markets. If you observe a sudden increase in the supply of a 1-year bond, how will it change the yield on this bond, if everything else remain unchanged? (2.5 marks, Max 50 word limit)
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a Implication for the 1year bond yield in 2023 In August 2021 you observed that the yield on a 3year ...See step-by-step solutions with expert insights and AI powered tools for academic success
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