Given the indicated maturities listed in the following table, assume the followi

Question

Given the indicated maturities listed in the following table, assume the following yields for U.S Treasury securities: Maturity (Years) 1 5 10 20 30 2.0 3.1 3.8 4.6 5.5 Yield 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 itselif. 10 Yield Curve 4 15 20 25 30 MATURITY (Years) The graph's yield curve represents yield curve. a downward-sloping Based on the yield curve shown, w atements is true? a humped o Corporate bond yield curve an upward-sloping Treasury bond yield curves

Explanation / Answer

1. Upward sloping

2. Interest rates on short term maturities are lower than rates on long term securities

3. Increase

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