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Term 6 months 1 year 2 years 3 years 4 years 5 years 10 years 20 years 30 years Rate 5.1% 5.5 5.6 5.7 5.8

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Term 6 months 1 year 2 years 3 years 4 years 5 years 10 years 20 years 30 years Rate 5.1% 5.5 5.6 5.7 5.8 6.0 6.1 6.5 6.3 The table above shows the yield curve for US Treasury securities. a. Plot the yield curve based on the data. (You can draw it free-hand and take a picture of it and attach as a .jpeg) b. What type of yield curve is this? What information does the curve tell you? Based on the curve if you needed to borrow money for longer than 1-year, would it make sense to borrow short-term and renew the loan or borrow long term? Explain. I C d

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