Yield Curve
Date Submitted: 09/10/2006 03:15:24
Category: / Science & Technology / Transportation
Length: 6 pages (1549 words)
Category: / Science & Technology / Transportation
Length: 6 pages (1549 words)
1. What is plotted on the yield curve? Be specific about the X and Y axes. Be specific about which securities' yields are plotted on a yield curve.
Answer:
U.S. Treasury Yield Curve
A yield curve that shows the relationship between yields and maturity dates for a set of similar bonds, usually Treasuries, at a given point in time. Yield curves are used to compare yields of different securities, to benchmark rates and to discover …
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…also referred to as the liquidity spread. The opposite situation - short term interest rates higher than longer term rates - will occur in the near future in the U.S. bond market. Yield curves move on a daily basis, representing the market's reaction to news. Based on the market segmentation analysis, the two-year yields are pushed up by Federal Reserve stead increasing rate, while low inflation and strong investor demand helped depress longer-dated yields.
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