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Business Date Chosen Five Years Ago 08/21/2006 1-month Nominal T-bill Rate on th

ID: 2678553 • Letter: B

Question

Business Date Chosen Five Years Ago 08/21/2006
1-month Nominal T-bill Rate on that Date 5.15%
3-month Nominal T-bill Rate on that Date 5.11%
6-month Nominal T-bill Rate on that Date 5.18%
1-year Nominal T-note Rate on that Date 5.07%
5-year Nominal T-note Rate on that Date 4.77%
10-year Nominal T-note Rate on that Date 4.82%
20-year Nominal T-bond Rate on that Date 5.04%
30-year Nominal T-bond Rate on that Date 0%

On the chosen date was the yield curve rising, falling, or flat? What explanation would you give for this shape?

Explanation / Answer

rising demand increases with decreasing price