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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: E! 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.) O A. OB Yield Curve of U.S. Treasury Securities 16 Yield Curve of U.S. Treasury Securities 0 0 12 12 Yield (%) 8 Yield 2 23 0 20 15 Time to Maturity Wears 5 15 Time to Maturity wears Time to Maturity (years) Time to Maturity (years) OD. O C. Yield Curve of U.S. Treasury Securities W 16 Yield Curve of U.S. Treasury Securities 16 14 5 12 14 12 10 10- Yield (%) Yield (6) 8 6 6 ONCO 2 0 20 20 5 10 15 Time to Maturity gears, U 5 10 15 Time to Maturity (years)

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