Using data from the St. Louis Federal Reserve
(FRED) (http://research.stloui sfed.org/fred2/),
analyze bond prices and interest rates.
a. Find the most recent values and the values
from the same month 1 year and 2 years earlier
from FRED for the 1-Year Treasury Bill:
Secondary Market Rate (TB1YR).
b. Suppose the 1-Year Treasury bill has a face
value of $2,000. Using the interest rates found
above, calculate the price of a 1-Year Treasury
Bill for each of the 3 periods.
c. From the previous computations, what can
you determine about the relationship between
bond yields and bond prices?