Go to www.federalreserve.gov/releases/h15/data.htm. The site contains data on a number of different bond yields. Go to Historical

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Go to www.federalreserve.gov/releases/h15/data.htm. The site contains data on a number of different bond yields. Go to “Historical Data” and compare the annual historical yields on 10-year Treasury bonds to Moody’s Aaa and Baa from 1976 to the present. Copy the data to Excel and make a chart so that the data is easier to analyze.

 Identify points when Treasury yields are at a trough and when they are at a peak. Comment on interest rate anticipation strategies that bond investors in hindsight could have implemented either to earn higher returns or to protect their bond positions.

 Examine the risk premiums on Aaa and Baa bonds to determine if they widen during periods of economic slowdown (such as in the late 1970s and early 1980s and in the late 1980s and early 1990s, 2000, and 2008) and narrow during periods of economic growth (mid 1980s, 1990s, 2001–2006).

Comment on how sector rotation and quality swap strategies could have been used during these periods.

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