Theory and Bonds.

Project 5

Go to a financial Web site, such as finance.yahoo.com, http://www.google.com/finance, or moneycentral.msn.com. Obtain information on the yields and maturity for:

1. U.S. treasuries
2. Municipal bonds
3. Corporate bonds

Discuss what the pure expectations theory would imply about the yield curve. Compare and contrast the yields and maturities for each of the securities. Discuss which you would hold and why relative to interest rate risk. You must submit your backup in Excel or other supporting documentation showing how answers were reached.