Bond Yield, 10 Year Treasury Bonds

Exercises

Questions and Exercises

1. Access the data on the 10-year U.S. Treasury bond yield and the data on the consumer price index (CPI). Compute the real yield on the 10-year U.S. Treasury bond yield for the most recent month of data available by subtracting the inflation rate (% change from last year for CPI) from the bond yield. Do the same for March 1980. Compare the two real yield values you have computed. How well are lenders doing now as compared to March 1980?

2. Access the data on the 10-year U.S. Treasury bond yield and the data on real GDP. Find the month and year that featured the highest bond yield since 1960, and then go to the real GDP data set and determine whether the economy was in a period of growth or recession. Briefly explain the relationship you find between the bond yield and the rate of economic growth.

3. The U.S. was in a recession from January through July 1980, July 1981 through November 1982, July 1990 through March 1991, and from March through November 2001. Access the data on the 10-year U.S. Treasury bond yield and graph monthly bond yield data during these four recessions. Briefly explain the relationship you find between the bond yield and periods of recession.

 

 

 

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