Question: Corporate bond yields and yield changes on US Treasury yields and yield changes. Obtain the weekly yields of Moody's seasoned Aaa corporate bonds and the

Corporate bond yields and yield changes on US Treasury yields and yield changes.

Obtain the weekly yields of Moody's seasoned Aaa corporate bonds and the weekly yields of 3-month Treasury bills for the years 2008 through 2018. (Obtain data from FRED.)

(a) Regress the weekly yields of Moody's seasoned Aaa corporate bonds on the weekly yields of 3-month Treasury bills for the period 2008 through 2010.

Are the results surprising? Discuss.

(b) Regress the change in weekly yields of Moody's seasoned Aaa corporate bonds on the weekly change in yields of 3-month Treasury bills for the period 2008 through 2010.

Are the results surprising? Discuss.

Analyze and discuss the residuals.

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