Discussion

Discussion: Two parts total and make sure to related the discussion to the book chapter 15.

Part 1: Historical Yield Curve Discussion

Go to the following website. Discuss what you observe, why this happens, and hypothesize what the future might bring. Make sure that you relate it to this weeks’ lecture material, especially the Term Structure.

Part 2: Current Yield Curve Discussion

Look up the current yield curve and discuss its shape and what this means. Furthermore calculate/estimate the spot rate and short rate if you have a 2-year investment horizon. What investment strategy would you choose and why?