Graph the bond yield to maturity

Assignment Help Financial Management
Reference no: EM13124740

Bonds and Term Structure

1. Graph the bond yield to maturity (YTM) on the y-axis of an XY-scatter plot, with the bond to maturity in years on the x-axis.

2. Use a polynomial regression of order three to determine the relation between the YTM and the bond maturity.

3. Identify two possibly mispriced bond issues, one overpriced and one underpriced. For each of these bonds estimate for how much it is mispriced relatively to the values represented by the model of the yield curve estimated in question 2.

4. Compute the Macauley Duration for the following bond issues that are included in the dataset (use the DURATION function) :

1174_Bonds and Term Structure.png

5. Assume that immediately after these calculations were done there was a parallel shift upwards in the term structure such that all rates were increased by 0.2%. Estimate the change in the prices of the bonds listed in question 4 (use the PRICE function).

Compute the actual change in price by estimating the new price for the new interest rate and compare with the value obtained from

277_Bonds and Term Structure1.png

Attachment:- Bond.xlsx

Reference no: EM13124740

Questions Cloud

Difference between identity and conditional : What is the difference between identity, conditional, and inconsistent equations? Support your answer with an example of each. What is the necessary condition for the following fraction to be valid? What value(s) of "x" that cannot be used in this ..
What is the dollar value of the ending inventory : A company manufactures a single product. During year 2012, a total of 20,000 units of this product were produced and 15,000 units were sold. The sales price was $20.00 per unit.
Little cabbage firm acquired an adjacent lot to construct : Little Cabbage Firm acquired an adjacent lot to construct. Fees paid to remove an old building from the land were $9,000. Materials salvaged from the demolition of the building were sold for $3,000. A contractor was paid $800,000 to construct a new..
India''s freedom struggle : Chapter three of Wolpert's A New History of India repeatedly refers to an Aryan "invasion" or "conquest" of India. Why is this controversial?
Graph the bond yield to maturity : Identify two possibly mispriced bond issues, one overpriced and one underpriced. and graph the bond yield to maturity (YTM) on the y-axis of an XY-scatter plot, with the bond to maturity in years on the x-axis.
How much energy (in calories) is needed : How much energy (in calories) is needed to heat 12cm^3 of fat from room temperature (25C ) to its melting point (35C)?  Specific heat of fat 0.45 cal/(g*C, and the density of fat is .94g/cm^3)
Find test statistic-degrees of freedom and the p-value : State appropriate null and alternative hypotheses. Report the test statistic, its degrees of freedom, and the P-value. What do you conclude?
Compute the cost of the units transferred : Beginning inventory was 20% complete for conversion cost. Ending inventory was 70% complete for concersion costs. Compute the cost of the units transferred out during July and the ending inventory July 31 using the weighted-average method.
Is histogram approximately bell shaped and symmetric : Use 9 classes. Is the histogram approximately bell shaped and symmetic? Does this agree with the results predicted by the Central Limite Theorem?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Calculate the minimum variance and optimal portfolio

Create a model that will automatically calculate the minimum variance and optimal portfolio as well as be able to draw the efficient frontier for a 3 risky asset portfolio.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

  A synthesis of contemporary market orientation perspectives

A synthesis of contemporary market orientation perspectives

  What is the firms cost of preferred stock

What sources of capital should be included when you estimate XYZ's WACC? and Should the component costs be estimated on a before or after-tax basis? Why?

  Provide financial planning advice to the clients

Provide financial planning advice in the case study.

  Nonlinear programming problems

Classify the problems as to whether they are pure-integer, mixed-integer, zero-one, goal, or nonlinear programming problems.

  Limiting the significant growth of a sole proprietorship

Short Answer and Short Problems,  Briefly discuss the most important factors limiting the significant growth of a sole proprietorship or partnership?

  Describe vernons product life-cycle theory of fdi

Describe Vernon's product life-cycle theory of FDI

  Wal-mart cost of capital

Estimate the market value and weight of each component of the capital structure and estimate the book value and weight of each component in the capital structure.

  Compute the cost of equity financing

This assignment shows how to Compute the cost of equity financing and aslo Compute the Weighted Average Cost of Capital.

  Capital budgeting case

Your company is thinking about acquiring another corporation. You have two choices—the cost of each choice is $250,000. You cannot spend more than that, so acquiring both corporations is not an option. The following are your critical data:

  What is the net present value

What is the Net Present Value (NPV) of the asset if the company's required rate of return on such assets is 10%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd