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risk management - Essay Example
Author : keaton25
Finance & Accounting
Pages 8 (2008 words)
Finance and Accounting Risk Management Executive Summary The United States (U.S.) Treasury securities yield curve is one of the most intimately watched data of the global economy. Yield curve graph gives a rapid way to evaluate and compare the yields that are offered by the different types of fixed income securities and also to find out the expectations of the investor for market conditions in the future…
This report will focus on the different types of yield curves and how changes in the slope of yield curve impacts the future prospects of the economy. Further, it will also take into consideration the effectiveness of monetary policy responses in the time of financial crisis and how those responses have affected the shape of the yield curve. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Task 1: To Examine the Types of Yield Curve 4 Task 2: Impact of Yield Curve on Future Economic Prospect 6 Task 3: Effectiveness of Monetary Policy 9 Task 4: Implication for Investor and Policy makers 10 Conclusion 10 Appendices 11 Reference 13 Introduction A yield curve is referred to the graphical representation of the relationship among the yield on a group of securities for different maturities. It explains how interest rates differ with the term to maturity (Burton, Burton and Nesiba, 2010, p.115). The yield curve has too much information about the economic conditions and the future interest rates. In U.S. the benchmark interest rate last recorded was at 0.25%. Federal Reserve reports the interest rates in U.S. ...