The graph's yield curve represents yield curve. Based on the yield curve shown, which of the following statements is true? Interest rates on medium-term maturities are higher than rates on long- and short-term maturities. A market with a yield curve as shown on the graph has higher rates on debt securities that mature within 10 to 30 years than those with maturities of less than 1 to 5 years.
The graph's yield curve represents yield curve. Based on the yield curve shown, which of the following statements is true? Interest rates on medium-term maturities are higher than rates on long- and short-term maturities. A market with a yield curve as shown on the graph has higher rates on debt securities that mature within 10 to 30 years than those with maturities of less than 1 to 5 years.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:3. Drawing a yield curve
Given the indicated maturities listed in the following table, assume the following yields for US
Treasury securities:
On the following graph, plot the yield curve implied by these interest rates. Place a blue point
(circle symbol) at each maturity and interest rate in the table, and the yield curve will draw itself.
INTEREST RATE (Percent)
10
9
8
7
Maturity (Years) 1 5 10 20 30
Yield (%)
3.6 5.5 5.5 4.2 4.0
0
0
5
10
15
MATURITY (Years)
20
25
The graph's yield curve represents
30
Yield Curve
(?)
yield curve.
Based on the yield curve shown, which of the following statements is true?
O Interest rates on medium-term maturities are higher than rates on long- and short-term
maturities.
A market with a yield curve as shown on the graph has higher rates on debt securities
that mature within 10 to 30 years than those with maturities of less than 1 to 5 years.
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