Answer to Question #295290 in Finance for ayza

Question

What is the typical relationship between interest rates on three-month Treasury bills, long-term Treasury bonds, and Baa corporate bonds? 

Answer 1

The rate of interest on a three-month Treasury bills fluctuates more than the other interest rates and is lower on average.

Long-term treasury bonds are inversely relate to the interest rates. When there is an increase in the interest rates, the prices of the long-term treasury bonds reduce.

The interest rate on Baa corporate bonds is higher on average than the other interest rates.