The following figure shows the daily three-month treasury yield in September 2008. Refer to the following figure when answering the following questions.
Figure 10.1: Daily Three-Month Treasury Yield: September 2008
-Consider the data in Figure 10.1. What event precipitated the change in the yield in mid-September?
A) the expanded trade deficit with China
B) the election of Barack Obama
C) the bankruptcy of Lehman Brothers
D) the Greek fiscal crisis
E) the continuing Japanese recession

Question

The following figure shows the daily three-month treasury yield in September 2008. Refer to the following figure when answering the following questions.
Figure 10.1: Daily Three-Month Treasury Yield: September 2008  
-Consider the data in Figure 10.1. What event precipitated the change in the yield in mid-September?
A) the expanded trade deficit with China 
B) the election of Barack Obama 
C) the bankruptcy of Lehman Brothers 
D) the Greek fiscal crisis 
E) the continuing Japanese recession

Quizplus · Accepted Answer

The change in yield in mid-September coincided with the bankruptcy of Lehman Brothers. The uncertainty and fear surrounding the collapse of such a large financial institution led to a flight to safety by investors, which increased demand for Treasury securities and thus drove down yields.

The Following Figure Shows the Daily Three-Month Treasury Yield in September