Calculate the expected expectations yield

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Reference no: EM131583532

Given the following market data on U.S. Treasury instruments:

1-year note yield = 1.83% 5-year note yield = 2.79%

2-year note yield = 1.99% 6-year note yield = 3.04%

3-year note yield = 2.21% 7-year note yield = 3.58%

4-year note yield = 2.42% 8-year note yield = 4.18%

And non-changing premiums of 0, .07%, .22%, .39%, .52%, .64%, .75%, 88%, & .98%

Calculate the expected expectations yield for a (3,2,1,2) path.

Calculate the pure expectations yield for a (1,4,3,) path.

Calculate the expected empirical yields for a (2,5,1) path.

Calculate the expected expectations yield for a 5-year note purchased at the beginning of year 3.

Calculate the expected market yield on a 4-year note purchased at the beginning of year 2.

Determine the expectations yield on a 5-year note purchased today.

Describe the yield curve and provide a general interpretation of what implies about the economy.

Reference no: EM131583532

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