Analysis of international financial markets
When you plot graphs, you SHOULD use E-Views and make sure to label them correctly, so they are clearly readable and interpretable.
a) Plot the daily time series of i) target federal funds rate; ii) 3-month U.S. treasury bill rate; iii) 10-year U.S. treasury bond rate from January 2020 to June 2020.
b) Using the standard bond pricing model, explain the initial impact on U.S. Treasury bond markets of the Fed’s emergency policy action taken on March 15, 2020.
c) What happened to the treasury term spread (10yr-3m), and why?
d) Plot the daily time series of i) target federal funds rate; ii) 10-year Aaa corporate bond yields; iii) 10-year Baa corporate bond yields from January 2020 to June 2020.
e) What happened to the credit spread, and why?
I have tried to write down my answers. It’s in blue in the word file attached below. Also, I have uploaded data files in excel for the plotted graph. I don’t know if I have understood it correctly by the instruction “plot the daily time series of”.. I want answers to be in detail as much as possible. Thank you.😀