Lecture 6

0 0 2 0 0 0 0 0 3m 6m 12m 2y 5y 2 0 0 30y 10y gold

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Unformatted text preview: r Time 3 Month 0.0000 0.0550 0.06% +4 - 4 10/11/2013 6 Month 0.0000 0.0650 0.07% +5 - 8 10/11/2013 12 Month 0.0000 0.1250 0.13% +3 - 5 10/11/2013 2 Year 0.2500 99- 25¾ 0.35% - 9 +9 10/11/2013 Oil Res is ting Big Drops on U. Shutdown, Fed 5 Year 1.3750 99- 25½ 1.42% - 30 + 76 10/11/2013 M 10 Year 2.5000 98- 12½ 2.69% - 22 + 103 10/11/2013 30 Year 3.6250 97- 26 3.75% - 10 + 92 10/11/2013 Change s hown in bas is points Commodities Demand, Tradin Migrating to As ia A What is the typical shape of the yield curve • A) The YTM for long term bonds is always above that for short term bonds • B) The YTM for long term bonds is typically about the same as that for short term bonds • C) The YTM for long term bonds is often below that of short term bonds 10 year yield and 1 year yield Roughly the same over the long term, differences in the shorter term 10 year yield - 1 year yield slope low or negative before recessions high slope after recessions typical slope is positive A longer term perspective Great Depression and now 10 year yield and 30 year yield pretty similar Interest Rates and Inflation • Interest Rates give a good forecast of inflation • A) Yes, over both the short term and the long term • B) Yes, but only over the long term • C) Yes, but only over the short ter...
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This note was uploaded on 11/11/2013 for the course ECON 106F taught by Professor Atkeson during the Fall '05 term at UCLA.

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