Briefly discuss the general shape of yield curve

Assignment Help Financial Accounting

Reference no: EM13826291

1. Using the Wall Street Journal or Barron’s, find the bond yields for Treasury securities with the following maturities: three months, six months, one year, three years, five years, 10 years, 15 years, and 20 years. Construct a yield curve based on these reported yields, putting term-to-maturity on the horizontal (x) axis and yield-to-maturity on the vertical (y) axis. Briefly discuss the general shape of your yield curve. What conclusions might you draw about future interest rate movements from this yield curve?

2. Explain what will happen to a bond’s duration measure if each of the following events occur (provide an explanation for only those events listed below):

The yield-to-maturity on the bond falls from 8.5% to 8%.

The bond gets one year closer to its maturity.

Market interest rates go from 8% to 9%.

Reference no: EM13826291

Questions Cloud

Calculate the operating cash flows : Laurel’s Lawn Care, Ltd., has a new mower line that can generate revenues of $135,000 per year. Direct production costs are $45,000, and the fixed costs of maintaining the lawn mower factory are $17,500 a year. The factory originally cost $0.9 millio..

Calculation of capm of a company : Calculate the CAPM for a company and write a report on it. The chosen company is Fidelity National Information Services (FIS) listed on the NYSE.

Distance vector routing with link state routing : Describe the differences between a repeater, a switch and a router. Why is a router generally more expensive and complex than a switch, and why is a switch generally more complex and expensive than a repeater?

What else might affect the interest rate on a bond : How does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond? What is Chapter 7 liquidation and Chapter 11 reorganization? When should each b..

Briefly discuss the general shape of yield curve : Using the Wall Street Journal or Barron’s, find the bond yields for Treasury securities with the following maturities: three months, six months, one year, three years, five years, 10 years, 15 years, and 20 years. Briefly discuss the general shape of..

What is the firms weighted average after tax cost of debt : Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 9 percent, matures in 3 years, has a total face value of $6 million, and is quoted at 108 percent of face value. The second issue has a 7.5 percent coupon, matu..

Report on consumer behavior of jaguar : Report On Consumer Behavior Of Jaguar

Ivey case study part king inc : Part Kind Inc. Ivey Case Study. 9B08B001. Answer the following questions about the case study

What is the clean price of the bond : You purchase a bond with an invoice price of $1,120. The bond has a coupon rate of 8.5 percent, semi annual coupons, and there are three months to the next coupon date. What is the clean price of the bond?

User Account

All Pages