Question

In: Finance

Use any website you can found data to produce the most recent yield curve. Be very...

Use any website you can found data to produce the most recent yield curve. Be very specific about the website you use, step by step.

Use any website you can found data to find all yield curve inversion events for the past 50 years. Be very specific about the website you use, step by step.

Solutions

Expert Solution

Solution:

Part A)

I have used the treasury official website for finding the interest rate. The website address is given in the image. The yield curve is plotted and it is upward sloping.

Step: Open the treasury website. Go to resource center and download the daily data for interest rate.

Part B )

Yield curve inversion: When the long term interest rate is lower than the short term interest rate then the yield curve is inverted. There are many instances where this inversion has happened. This happened recently in Dec 2018. It is perceived that when the yield curve is inverted then the economy may slow down. This event has happened before all the recessions.

These are the major periods when this event has happened -1981, 1991, 2001, 2005, 2006,2008 , Dec 2018

Data source: reuters and the balance


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