You are a senior financial analyst and have been asked to analyse recent developments in the Euro era and the U.S markets and advise the top management on the economic conditions in both markets. You have collected data on the euro area yields of the central government bonds and the U.S. treasury bond yields. For this purpose, you have downloaded the following data from the European Central Bank and the U.S Federal Reserve Bank on 23rd April 2021 (Mo = month, Yr = Year): 23/04/2021 U.S. Treasury Bond Yield Rates 0.08% 0.10% 0.11% Euro area Central Government Bond Yield Rates Time to Maturity 1 Mo З Мо 6 Mo 1 Yr -0.50% -0.62% 065% 0 12%
You are a senior financial analyst and have been asked to analyse recent developments in the Euro era and the U.S markets and advise the top management on the economic conditions in both markets. You have collected data on the euro area yields of the central government bonds and the U.S. treasury bond yields. For this purpose, you have downloaded the following data from the European Central Bank and the U.S Federal Reserve Bank on 23rd April 2021 (Mo = month, Yr = Year): 23/04/2021 U.S. Treasury Bond Yield Rates 0.08% 0.10% 0.11% Euro area Central Government Bond Yield Rates Time to Maturity 1 Mo З Мо 6 Mo 1 Yr -0.50% -0.62% 065% 0 12%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You are a senior financial analyst and have been asked to analyse recent developments in
the Euro era and the U.S markets and advise the top management on the economic
conditions in both markets. You have collected data on the euro area yields of the central
government bonds and the U.S. treasury bond yields. For this purpose, you have
downloaded the following data from the European Central Bank and the U.S Federal
Reserve Bank on 23rd April 2021 (Mo = month, Yr = Year):
23/04/2021
Euro area Central
U.S. Treasury
Time to Maturity
Government Bond Yield
Rates
Bond Yield
Rates
1 Мо
З Мо
6 Мо
1 Yr
2 Y
3 Yr
4 Y
5 Y
7 YL
10 Yr
20 Yr
30 Y
-0.50%
-0.62%
-0.65%
-0.70%
0.08%
0.10%
0.11%
0.12%
0.14%
-0.74%
-0.74%
-0.72%
-0.63%
-0.51%
-0.17%
-0.05%
0.20%
0.27%
0.46%
0.67%
1.19%
1.40%
REQUIRED:
a) Considering both yield rates on 23rd April 2021, depict the yield curves charts and
describe the implied market outlook in the Euro area and the U.S. market to the top
management.
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