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hypotheses on the shape of the yield curve. Respondent presented
evidence that market prognosticators were anticipating declining
interest rates as of February 23, 1990. Specifically, the March
10, 1990, edition of Blue Chip Economic Indicators, a monthly
publication containing a survey of the Wall Street community and
economists, reported that the "consensus" view was that Treasury
bill rates would decline from 7.7 percent in the first quarter of
1990 to 7.4 percent in the fourth quarter of 1990 and to 7.3
percent in the fourth quarter of 1991. Treasury bills are short-
term debt instruments that correlate with 3-month LIBOR. The
Blue Chip Economic Indicators survey remained fairly constant
throughout the summer of 1990. However, the August 10, 1990,
edition reported that the "consensus" view was that Treasury bill
rates would fall to 7.2 percent in the fourth quarter of 1990 and
remained virtually unchanged through the fourth quarter of 1991.
Contrary to Smith's forecast, interest rates fell
dramatically between February 1990 and September 1992.
Specifically, 3-month LIBOR rates declined from 8.375 percent in
February 1990 to 3.125 percent in September 1992. If the
partnerships had held the LIBOR notes for their full 5-year
terms, the partnerships would have lost $19,716,000.
XII. Brunswick's Tax Returns and Related Documents
Brunswick filed a Form 1120 (U.S. Corporation Income Tax
Return) for 1990 reporting (on a consolidated basis) a net short-
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