Compute the Term Spread and the Butterfly Spread for the following data. What shape does the yield curve have?
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Q1: Use the following discount factors when needed.
Q2: How many securities do you need to
Q4: You currently hold a 2-year fixed rate
Q5: Use the following discount factors when needed.
Q6: You currently hold a 7-year fixed rate
Q7: If you need three securities to hedge
Q8: What is the advantage of a factor
Q9: Use the following discount factors when needed.
Q10: You currently hold a 7-year ?xed rate
Q11: Use the following discount factors when needed.
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