The table shows term to maturity of Australian bonds and their respective yields on 22 April 2021. Using this information answer the following questions.

 

Term to Maturity                              Bond Yield
         
   1 year                                                 0.07%

   2 years                                               0.07%

   5 year                                                0.70%

   10 years                                           1.66%

   20 years                                           2.42%

   30 years                                           2.64%

   

 I.  Will the market interest rate increase or decrease in the future? Explain clearly.

 II.  Will you invest in short term or long term bonds? Explain clearly.

III.  What do you think is the shape of the yield curve? Explain your answer.

Answer rating: 100% (QA)

a As we can see in the above table the interest rates are increasin co... View the full answer