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Yield curve A firm wishing to evaluate interest rate behavior has gathered yield data on five U.S. Treasury securities, each having a different maturity and

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Yield curve A firm wishing to evaluate interest rate behavior has gathered yield data on five U.S. Treasury securities, each having a different maturity and all measured at the same point in time. The summarized data follow: a. Select the graph that correctly shows the yield curve associated with the data shown in the table. b. Describe the resulting yield curve in part a, and explain what it says about the direction of future interest rates under the expectations theory. a. Which of the following graphs correctly shows the yield curve associated with the data shown in the table? (Select the best answer below.) Data table OA. OB. Yield Curve of U.S. Treasury Securities Yield Curve of U.S. Treasury Securities 16 (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Q 14 14 12- 10- 07 61 b U.S. Treasury Security Yield (%) Yield (%) B D E Time to maturity 1 year 10 years 6 months 20 years 5 years Yield 7.4% 6.3% 8.1% 6.1% mo 6.7% 20 20 10 15 Time to Maturity (years) 10 15 Time to Maturity (years) . OD. Print Done b Q Yield Curve of U.S. Treasury Securities 167 14- 12- 10- 8 8- b Yield Curve of U.S. Treasury Securities 167 14 12 10- 1 Yield (%) Yield (%) 4 0 20 20 5 10 15 Time to Maturity (years) 10 15 Time to Maturity (years)

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