Distinguish among the three types of interest bearing securities on the graph.

With respect to Figure 1.1 (Mishkin text Chapter 1, p 3), post your observations/explanations for any one of the seven items below. Identify the number of the item you are answering; no more than three students should post for any one item:

1.) Distinguish among the three types of interest bearing securities on the graph.
2.) In general, what do you notice about their interest rates over time?

3.) The U.S. Government issues the U.S. Long-Term Bonds and Three-Month Treasury bills. They are both considered default risk free. Which interest rate is usually higher? Why?
4.) Corporate Baa Bonds (considered investment grade) have fairly low risk of default for bondholders. Over time, are their interest rates usually higher or lower than U.S. debt issues? Why?
5.) During the 1970s and early 1980s, inflation was higher than today and, at times, very high. What happened to interest rates during these periods of high inflation?
6.) Of the three types of securities graphed, rank them according to risk levels from an investors perspective.
7.) What is the relationship between risk and return levels?

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attached is the module

please pick between question 1, 4, or 6

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