website: https://finra-markets.morningstar.com/BondCenter/Default.jsp

1. On this page, you see interest rates for bonds, including U.S. government bonds (Treasuries) and private bonds in the

"Bond Ticker". In general, where do these interest rates come from (hint: the answer is not found on the web page. It's chapter 6...)?

2. Look at the rates under "Bond Yield and Performance At-A-Glance" for "Treasury Yield". These numbers represent rates for federal government bonds of maturities from 3 months to 30 years. Describe the general relationship between the

interest rate ("% Yield") and maturity of these bonds.

3. Is this term structure normal or inverted?

4. Based on your answer to question number 2 about the term structure, what can you say about people's outlook for the economy? Is it optimistic or pessimistic? Why?

5. Look at the graph next to the "Treasury Yield" list. This graph represents the Yield Curve. The X and Y axes have numbers, but they are not clearly identified. What SHOULD be the labels for the X-axis (horizontal)and the Y-axis

(vertical)?

6. Click on any bond from the "Corporate Bond Ticker". (If there is no Moody's rating, no "Last Trade Yield", or the

maturity year is missing or something weird like "3999" go back and choose a different bond)

Write the Issuer Name here:______________________________

Write the Moody's Rating here:_______________________________

Write the Maturity Year here: _______________________

Write the interest rate ("Last Trade Yield") here: _______________________

7. Would this bond be considered "Investment Grade" category or "High Yield" (speculative) category? How would its

interest rate compare to bonds in the other category (higher or lower)?

8. For the same bond you chose in #5, Calculate the 'Risk Premium" (get as close as you can with the Treasury maturity).

9. What does the risk premium tell you?