# Bond and Yield Curve Assignment

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Plot the zero-coupon yield curve on October 1, 2009. 3) Based on the yield curve on October 1, 2009, calculate the expected rates on zero- coupon bonds with one-quarter maturity that are to be sold on the first day of the quarter that starts one, two, three and four quarters from Cot 1 , 2009 respectively, I. E. The first day of the first, second, third and fourth quarter of 2010. These expected rates are also called the forward rates. (4) Based on your calculations, please comment on the market expectation on Cot 1, 2009 for interest rates on one-quarter authority zero-coupon bonds that are to be sold on the first day of the above- mentioned four quarters.

Over what time intervals does the market expect the short- term rates to go up or down? (5) Get the actual rates on zero-coupon bonds with one-quarter maturity that are sold on the first day of each of the four quarters defined above and compare your calculated forward rates to the actual rates. Please comment to what extent the market expectations are realized or not realized? (6) Repeat steps (2) to (5) for the yield curve on October 4, 2011. Part II: (7) Plot the yield curve on July 31, 2013.