Question: Problem 2 Yield Curves and Forward Rate Calculations 1 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 20

Problem 2 Yield Curves and Forward Rate Calculations 1 Mo 3

Problem 2 Yield Curves and Forward Rate Calculations 1 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 20 Yr Treasury.gov has provided the following yield curve data for 10/13/20 and 10/15/19 Date 10/13/2020 10/15/2019 Describe the change in short term and long term rates over the past year 2 Mo 0.09 1.74 0.09 0.16 0.11 1.67 0.12 1.67 0.13 1.65 0.18 1.6 10 Yr 0.52 1.68 1.72 0.31 1.59 1.61 30 Yr 1.29 2.06 0.74 1.77 1.52 2.23 1 year Forward Rate% 1 year Forward Rate% in in 1 year 2 years Calculate the 1 and 2 year forward rates 10/15/2019 10/13/2020 What do the current forward rates predict will happen to short term rates over the next year

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