Question: Table below presents information on three US Treasury bonds: Maturity Coupon Rate Price (per $100 of Face value) 6 months 1% 99.75 12 months 2%

Table below presents information on three US Treasury bonds:

Maturity

Coupon Rate

Price (per $100 of Face value)

6 months

1%

99.75

12 months

2%

100.5

18 months

1.5%

98.5

Use this information to answer the following questions:

  1. Is term structure increasing or decreasing? Please provide the explanation for the main reason for the term structure being increasing or decreasing.

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