Event affected the shape of the treasury yield curve

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Reference no: EM131836622

Federal Reserve Bank (FED) sold $ 400 billion of Treasury securities with maturities of less than 3 years and purchased same amount of Treasury securities with maturities between 6 years and 30 years between September 2011 and June 2012 (Operation Twist). How do you think this event affected the shape of the Treasury yield curve? Please be specific. Which of the three alternative theories of term structures would be consistent with this phenomenon?

Reference no: EM131836622

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