Question: Use the excel spread sheet to create expected interest rates for 1-year bonds for the years 2020to 2030 that are consistent with upwards sloping yield
Use the excel spread sheet to create expected interest rates for 1-year bonds for the years 2020to 2030 that are consistent with upwards sloping yield curves for the next 3 years. Upload a picture or pdf of the resulting yield curve.
Note: You only need to put in numbers in the row "Expected 1Y spot rate" and change them until the resulting yield curves have the correct shape. THINK why some numbers work and other do not. Can the expectation theory be valid if yield curves are upwards sloping for long periods of time?
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