Econ 423 - Spring 2009

We reviewed the table on page 2 as a way to introduce duration. The calculus on page 2 supplied a formal derivation. The handout was the bond table that used to appear in the Wall Street Journal. We studied the various columns, concluding with a spirited discussion of the relative merits of the 4.000 and 11.250 securities that mature in Februray 2015. Graphing the yield curve using numbers from the handout concluded the chalkboard presentation. The online portion featured bond yields from the WSJ supplemented with graphs and numbers for the money supply, the Fed funds rate, and excess reserves from FRED and the Fed. (Somebody forgot his camera.)