A:
You can sire a yield curve in Microsoft Excel if you are given the time to maturities of chains and their respective yields to maturity. The yield curve depicts the appellation structures of interest rates for bonds and the term structures could be universal, inverted or flat.
The shape of a yield curve indicates where future catch rates are headed. The x-axis of the graph of a yield curve is reserved for the rhythm to maturity, while the yield to maturities are located on the y-axis.
Assume you fall short of to plot the yield curve for the two-, five-, 10-, 20- and 30-year U.S. Moneys bonds (T-bonds). The respective yield to maturities of the U.S.T-bonds are 2.5%, 2.9%, 3.3%, 3.60% and 3.9%.
Now Mind These Five Steps:
- Using Microsoft Excel, enter “U.S. Bank Bonds’ Times to Maturity” in cell A1 and “U.S. Treasury Bond’s Yields to Full growth” in cell B1.
- Next, enter “2” into cell A2, “5” into cubicle A3, “10” into cell A4, “20” into cell A5, and “30” into room A6.
- Then, enter “2.5%” into cell B2, “2.9%” into apartment B3, “3.3%” into cell A4, “3.6%” into cell A5, and “3.9%” into apartment A6.
- Select cells A2 through A6 and B2 through B6 together and click on Insert. Secondary to the Charts tab, select Scatter and click on Scatter with Smooth Lines and Markers.
- Next, click on the chart, hand-picked Chart Elements and click on Axis Titles. For the horizontal axis, infiltrate “Time to Maturity (In Years)” and “Yields” into the vertical axis nickname. Enter “U.S. Treasury Bonds Yield Curve” into the Chart Call.
The resulting yield curve for these U.S. T-bonds is considered normal because it is concave down (raising), and the rates are increasing as the times to maturity are further out.