Reading 54: Term Structure and Volatility of Interest Rates butterfly, absolute, change, following

youzizhang

 

LOS a: Illustrate and explain parallel and nonparallel shifts in the yield curve, a yield curve twist, and a change in the curvature of the yield curve (i.e., a butterfly shift).

Q1. Suppose that there is a nonparallel downward shift in the yield curve. Which of the following best explains this phenomenon?

A)   The absolute yield increase is different for some maturities.

B)   The absolute yield decrease is different for some maturities.

C)   The yield decrease is the same for all maturities.

 

[此贴子已经被作者于2009-3-16 17:47:03编辑过]

youzizhang

 

LOS a: Illustrate and explain parallel and nonparallel shifts in the yield curve, a yield curve twist, and a change in the curvature of the yield curve (i.e., a butterfly shift). fficeffice" />

Q1. Suppose that there is a nonparallel downward shift in the yield curve. Which of the following best explains this phenomenon?

A)   The absolute yield increase is different for some maturities.

B)   The absolute yield decrease is different for some maturities.

C)   The yield decrease is the same for all maturities.

Correct answer is B)

A nonparallel downward yield curve shift indicates an unequal yield decrease across all maturities, i.e., some maturity yields declined more than others.

 

cyyap1011

 thanks

shij

3x

yy21

好

harbuzi

b

saifudan

 thx

hkgee

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leeyaoxee

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lenny_chen

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