Let’s compare 10-year corporate bonds and 10-year government bonds (called Treasuries). Go to the FRED economic database (https://fred.stlouisfed.org/) and search for “10 year corporate bond high quality”; you should find the series “10-Year High Quality Market (HQM) Corporate Bond Par Yield.” Click Edit Graph and then Add Line. Now search for “10-Year Treasury” and use the monthly series to match that for the corporate bond. 

a. Do 10-year corporate bonds or 10-year Treasuries offer a higher return? Why?

b. Usually the two series move closely together, but graph the two series around the 2008–2009 recession. What happens? Why?