Question 862 yield curve, bond pricing, bill pricing, monetary policy, no explanation
Refer to the below graph when answering the questions.
Which of the following statements is NOT correct?
(a) The 3-month government bill yield is likely to be given as a simple interest rate.
(b) The 10-year government bond yield is likely to be given as an annualised percentage rate compounding every six months since Japanese government bonds pay semi-annual coupons.
(c) As 10-year government bond yields fell over the last few years, bond investors would have made capital gains assuming that the bonds are fixed-coupon.
(d) The Japanese yield curve is ‘inverse’ at the latest time in mid-2017.
(e) The Japanese central bank has been maintaining expansionary monetary policy over the last few years.
Copyright © 2014 Keith Woodward