Question
Using a recent edition of the Wall Street Journal or a reliable on-line source (cite your source) 1. Provide the yields for the following securities:
Using a recent edition of the Wall Street Journal or a reliable on-line source (cite your source)
1. Provide the yields for the following securities:
Security | maturity | yield | premium |
US Treasury | 10-year |
|
|
Corporate Hi-quality | 10-year |
|
|
Corporate medium-quality | 10-year |
|
|
Municipal (tax-exempt) | 10-year |
|
|
If credit (default) risk is the only reason for yield differentials, then what is the default risk premium? During the Great Recession, Highest-Quality Corporate offered 0.8% above UST of the same maturity, while medium quality corporate offered 3.1%. How do they compare today explain why there may be any change.
2. Provide a Treasury Yield curve using a reliable source cite source and provide display of data and dates alongside the Yield Curve. Interpret the yield curve.
3.Using recent data from the US Treasury Daily Yield Curve Rates (specify the date used), calculate the Forward Rates for one-year and two-years from now, as well as the expected inflation rates indicated from the data for the current year and the next two years: Daily Treasury Yield Curve Rates. Repeat the process for the Daily Treasury Real Yield Curve Rates: Daily Treasury Real Yield Curve Rates. Explain the differences (if any) between the inflation rates anticipated by the two methods.
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