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Ploting the current yield curve - Research Paper Example
Finance & Accounting
Pages 4 (1004 words)
Plotting the Current Yield Curve Question 1: Answer Plot of the Normal current yield curve The yield curve for interest rates of US Treasury is generated from the information generated from WSJ. It is the yield for the most current trading results of various treasury securities in the US…
The yield curve shows a declining trend of Average Interest Rates for both the marketable and the non-marketable treasury securities in the US security market. It shows a negative gradient on the curve for a period of 13 years for the purpose of making qualitative comparison. For the entire period, the best period of interest for trading is 2013, since the interest rates are on the rise yet the results are for the yields for the first half of the year. It is a declining performance indicator showing that the interest rate is likely to continue falling in the coming years if all factors remain constant. The average rates of interest for the US Treasury Securities are computed using the total debts that are bearing interests, though they are not matured. There are certain US securities that are not included in the calculation of the average rates of interest, overall marketable and non-marketable debts as well as debts that bear interests. This is because these US securities do not have protection against the effects of inflation according to Fabozzi (2008). ...
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