NoteFinData - Note on Tracking Financial Data One objective...

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Note on Tracking Financial Data One objective of Econ 135 is to help you to become familiar with financial markets. Finding and tracking financial data is the first step. This note is intended to help you find the relevant data. Following financial data and financial news should also help you understand monetary theory, because daily market action often provides great examples of how the theory applies in practice. A key distinction is between current quotes and closing quotes . The most current data are best for ongoing “casual” tracking of market developments. Closing quotes are preferable for systematic analysis, and hence required for your diary. Most “free” online sources provide current data. Hint : The easiest way to obtain closing quote online is to look up the current quotes after the market has closed and before markets open the next day. Here are the financial instruments to monitor: (1) Three-month Treasury Bill Rate : Keep track of the bill yield. This is THE benchmark interest rate in the U.S. money market. Closing quotes : At go to Markets Data Center, click on the “Bonds, Rates & Credit Markets” tab, find the box “Complete Bonds, Rates & Credit Markets Data”, click on “Treasury Quotes.” On the Treasury Quotes page scroll down to T-bills. Look for the bill with maturity closest to but no greater than 91 days (usually in the 85-91 day range). The “Asked Yield” is the most recent closing quote. Current quotes : At look under marketdata > rates&bonds > Bills for “3-month.” At go to Markets Data Center main page, look under “3-Month Bill.” Print Sources: Many newspapers provide 3-month bill yields. (Caution: T-bill quotes in the WSJ print edition are weekly; don’t use them.) (2) Ten-year Treasury Note : Keep track of the yield and the price. This is the most liquid Treasury bond, and therefore widely viewed as representative for the bond market. (Aside: The term “note” is used for Treasury securities up to 10 years original maturity. Means the same as “bond.”) The yield on the 10-year note is a standard measure of “the” long-term interest rate. Closing quotes : At find the “Treasury Quotes,” as explained in above. Scroll down to about the middle of the page. Look for the maturity dates about 10 years ahead. Selected the security closest to, but no more than, 10 years. Write down the maturity and coupon rate of this security. Use the WSJ’s “Asked yield” as yield measure and the “Asked” price as price quote. Caution: Whenever you check the quotes, watch out if a new 10-year note appears—a new issue; then see the end of this Note for instructions. Current quotes
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This note was uploaded on 12/26/2011 for the course ECON 135 taught by Professor Bohn,h during the Fall '08 term at UCSB.

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NoteFinData - Note on Tracking Financial Data One objective...

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