Question: Please show as much work as possible, thank you 1. Use the information on bond yields for September 2016 and September 2017 to answer the

information on bond yields for September 2016 and September 2017 to answer Please show as much work as possible, thank you

1. Use the information on bond yields for September 2016 and September 2017 to answer the following questions YOU MUST SHOW YOUR WORK 1-Year Bond Yields (%) Sept 2016 and 2017 2016 2017 US Treasury Corporate AAA Corporate AA Corporate A Corporate BBB Municipal AAA Municipal AA Municipal A 0.68% 1.36% 0.73 1.49 1.22 1.62 1.82 1.42 2.15 1.85 0.75 1.09 0.88 1.23 0.99 1.28 US Treasury Yield Curve 1 Yr 4 Yr 1 Mo 5 Yr 20 Yr 30 Yr 6 2 Yr 3 Yr 10 Yr 9/17 2.16 2.33 0.96 1.06 1.20 1.31 1.62 1.92 2.63 2.86 1.47 9/16 0.86 0.75 1.96 2.28 0.16 0.26 0.42 0.58 1.12 1.39 1.56 5-year TIPS 9/17 0.16% 9/16 -0.17% A. Using 5-year bond yields, calculate the expected rate of inflation in September 2016 and September 2017: 2017 2016: B. Calculate the probability of default on a corporate BBB bond in September 2016 and September 2017: 2017 2016 C. Assuming a 35% tax bracket, calculate the tax equivalent yield for a Municipal AAA bond in September 2017 1. Use the information on bond yields for September 2016 and September 2017 to answer the following questions YOU MUST SHOW YOUR WORK 1-Year Bond Yields (%) Sept 2016 and 2017 2016 2017 US Treasury Corporate AAA Corporate AA Corporate A Corporate BBB Municipal AAA Municipal AA Municipal A 0.68% 1.36% 0.73 1.49 1.22 1.62 1.82 1.42 2.15 1.85 0.75 1.09 0.88 1.23 0.99 1.28 US Treasury Yield Curve 1 Yr 4 Yr 1 Mo 5 Yr 20 Yr 30 Yr 6 2 Yr 3 Yr 10 Yr 9/17 2.16 2.33 0.96 1.06 1.20 1.31 1.62 1.92 2.63 2.86 1.47 9/16 0.86 0.75 1.96 2.28 0.16 0.26 0.42 0.58 1.12 1.39 1.56 5-year TIPS 9/17 0.16% 9/16 -0.17% A. Using 5-year bond yields, calculate the expected rate of inflation in September 2016 and September 2017: 2017 2016: B. Calculate the probability of default on a corporate BBB bond in September 2016 and September 2017: 2017 2016 C. Assuming a 35% tax bracket, calculate the tax equivalent yield for a Municipal AAA bond in September 2017

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