Question 18.17: Consider the following yields to maturity:

Consider the following yields to maturity:

Years to Maturity Yield to Maturity
1 3.0%
2 3.5%
3 3.9%
4 4.4%
5 4.8%
6 5.2%

a. Graph the yield to maturity against the time to maturity.

b. Is this yield curve consistent with any of the yield curve theories? Explain.

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This is an upward-sloping yield curve.

18.17

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