Why do you think the yields vary with the maturity

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Reference no: EM131306302

Go to www.bloomberg.com/markets/rates/index.html.

a. How does the yield on Treasury securities with longer maturities differ from the yield on Treasury securities with shorter yields? Why do you think the yields vary with the maturity?

b. What is the yield on a 3-month T-bill? On a 6-month T-bill? If you needed funds in six months, you could invest in two consecutive 3-month T-bills or in one 6-month T-bill. Which strategy would you choose? Why?

c. What is the difference between the 10-year Treasury yield and the 10-year Municipal bond yield? Which do you think would be a better investment? Which would you feel more comfortable investing in considering your level of risk aversion?

Reference no: EM131306302

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