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Presentation_3-2_marked - The term structure of interest...

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The term structure of interest rates Econ 230 Financial Markets and Institutions Prof. Cahill Fall 2009
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The yield curve Plot of the yield to maturity of bonds with different terms to maturity Standard: use U.S. Treasury bonds Elsewhere: swap rate yield curve/LIBOR curve Use securities with no default risk, high liquidity Spreads represent maturity premium only Ideally use zero coupon bonds
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