Plot the current yield curve from the interest rates of U.S. Treasury securities
ID: 349143 • Letter: P
Question
Plot the current yield curve from the interest rates of U.S. Treasury securities as found in WSJ or IBD, or examine the chart WSJ or IBD provides. Do not show the curve, but do describe and define it (Normal or Inverted).
Instructions: Describe the trend of interest rates over the last several years. Give me your best educated estimate of where interests are headed over the next year and justify your answer. Determine the approximate percentage appreciation or depreciation of the NASDAQ Composite, Dow Jones Industrial Average, and the S&P 500 for the last 12 months and provide these figures.
Explanation / Answer
Plot the current yield curve from the interest rates of U.S. Treasury securities as found in WSJ or IBD, or examine the chart WSJ or IBD provides. Do not show the curve, but do describe and define it (Normal or Inverted).
While looking at the interest rate of U.S Treasury securities of different tenor in WSJ and drawing drawing the current yield, I observe that all graphs pertained to long term are upward sloping yield curves, when all the graphs pertained to short term are upward sloping. This gives lots of message regrinding the cost of money in the economy. I may make a note that, at present the treasury securities which has higher current yield. This will allure the investor to invest more in the long term securities, which ill lead to the economy development. It is also may be pointed out that, every long term investor are more benefited that short term investor in case of investment in treasury securities. The US dollars yield curve as on February 9 2005
Describe the trend of interest rates over the last several years
I looked at interest’s rate movements from January 2006 till july 2006 till july 2013 for all the U.S. Treasury securities. But I was surprised to see that there major were changes in graphs of intrest rate for all the tresuary securities. In all graphs I observe that the graph would go under dramatic change in the year 2009, which is not at all in the trend of earlier or subsequent years. To view some of the example. I observe for a 10 yr note that a yield of 1.50% in the year 2009 and now has gone to -35% yield as on 2013, it has a yield of -1.5 %. If I look at the graph of 30yrs bond yield I observe that the yield has gone down 2.60 5 in the year of 2009 against the present current yield of 3.60% on the same 30yrs bond yield . Hence this proves that how difficicult was in terms of liquidity in the year 2009
Determine the approximate percentage appreciation or depreciation of the NASDAQ Composite, Dow Jones Industrial Average, and the S&P 500 for the last 12 months and provide these figures.
The NASDAQ is an electronic exchange.Stocks is traded through an automated network. NASDAQ stands for: National Association of Securities Dealers Automated Quotations System. Generally speaking it is where most technology stocks are traded. An easy way to tell if a company is listed on the NASDAQ is to look at the ticker symbol. Symbols that are made up of four letters are listed on the NASDAQ such as: Microsoft = MSFT, Dell Computers = DELL, Cisco = CSCO.
From: May 11, 2010 – May 11, 2011
[(2845.06-2425.02)/ 2425.02] x 100 = + 17.32%
Current Year to Date - December 31, 2010- May 11, 2011
[(2845.06-2652.87)/ 2652.87] x 100 = +7.24%