Fight Finance

(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.