The behavior of the term structure of zero-coupon bonds parallels the behavior of coupon
bonds. Previous studies have demonstrated that there are synchronous changes among
different maturities of coupon bonds. Results of statistical and sign tests are used to
measure the degree of synchronicity, the relative amplitude of change and the amount of
sensitivity among different paired maturities for zero-coupon bonds. A comparison is then
made to the results of coupon bonds to verify that the behavior of the term structure of
zero-coupon bonds are consistent with observations in previous studies, including a study
of high-grade corporate bonds from 1901-1954 by Dr. David I. Meiselman. Generally, all
maturities move in the same direction with short term rates more synchronous than longer
term rates. Also, there is a general tendency for relative volatility to vary inversely with
maturity, therefore, short term maturities have a greater degree of volatility than do long
term maturities. The results are generally consistent with Meiselman's earlier findings.
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