Question: 21. Why would you use a curve fitting method on bond yields? a. Because market yields are moving up and down randomly, thus sometimes

21. Why would you use a curve fitting method on bond yields? a. Because market yields are moving up and down

21. Why would you use a curve fitting method on bond yields? a. Because market yields are moving up and down randomly, thus sometimes they need to be smoothed. b. In order to interpolate between market observations for a specific tenor you cannot observe. c. Because ordinary least squares always gives you a biased estimation. d. In order to make forecasts on the forward rates. @a) and c) are both true. f. b) and d) are both true.

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