Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze nominal interest rates.
a. Find the most recent values from FRED for the
following four variables: (1) Moody’s Seasoned
Aaa Corporate Bond Yield (AAA), the
(2) Moody’s Seasoned Baa Corporate Bond Yield
(BAA), (3) the 3-Month Treasury Bill: Secondary
Market Rate (TB3MS), and (4) the 10-Year
Treasury Constant Maturity Rate (GS10).
b. Explain whether the relationships among
these interest rates are what economic theory
would predict.