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YIELD CURVES Assume that yields on U.S. Treasury securities we re as follows: 6-1 Term Rate 6 months 4.69% 1 year 5.49 2 years 5.66

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YIELD CURVES Assume that yields on U.S. Treasury securities we re as follows: 6-1 Term Rate 6 months 4.69% 1 year 5.49 2 years 5.66 years 5.71 4 years 5.89 5 years 6.05 10 years 6.12 20 years 6.64 30 years 6.76 Plot a yield curve based on these data. What type of yield curve is shown? What information does this graph tell you? . b. . Based on this yield curve, if you needed to borrow money for longer than 1 year, would it make sense for you to borrow short term and renew the loan or borrow long term? Explain. d

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