Alfredo Wagar, an analyst, produced the graph below showing how Canadian government bond yields depend on the amount of time left until the maturity of the bond. He recommends “buying bonds with three-month, six-month, and 20-year maturities, since their yields are above the general trend.”

a) Comment on the ethics of Alfredo’s recommendation as it relates to the ASA Ethical Guidelines in Appendix C.

b) Draw a better graph of the data and state the improvement(s) you have made.

c) Using your graph, do you agree with Alfredo’s recommendation?

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20 yrs 10 yrs 7 yrs 5 yrs 3 yrs 1 yr 2 yrs 6 mo 3 mo Maturity 4. 3. 2. Yield (%)