Pick one of the three major bond indexes, and do some Internet research to identify the performance of the index during the last 24 months and any possible explanations for that performance.
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Pick one of the three major bond indexes, and do some Internet research to identify the performance of the index during the last 24 months and any possible explanations for that performance.
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- The Excel file Portfolio Bond Immunization Data contains information about three bonds. Use this data to: Compute the amount to be invested to meet the future liability noted in the data. This future liability is due in 10 years. Find a combination of Bond 1 and Bond 2 having a target duration of 10 years. Find a combination of Bond 1 and Bond 3 having a target duration of 10 years. Perform an analysis using a data table and an accompanying graph to determine which of the following options (i.e., a portfolio consisting of Bond 1 and Bond 2, a portfolio consisting of Bond 1 and Bond 3, or a portfolio consisting of Bond 2) would be preferred to attempt to immunize this obligation. Construct a data table by varying the yield to maturity that shows the value of each option at the end of 10 years. Use yield to maturity values ranging from 0% to 15% in 1% increments. Based on your data table, construct a graph that demonstrates the performance of these 3 options. Analyze each…What is the stand-alone risk? Use the scenario data to calculate the standard deviation of the bonds return for the next year.For the fourth discussion question of the quarter, we are going to examine a few bonds and determine which seems like the best investment for us. Information about bond price (assume all have a face value of $1,000), maturity date, coupon rate, analyst ratings, and pay dates will be given. Based on the description of the bonds provided, I would like for you to discuss which investment was the most appealing to you from the perspective of a potential investor and why you felt that way. As it is likely that there will many different companies chosen by different members of the class, please feel free to discuss and debate with your colleagues about areas of agreement and disagreement with your selections for your required follow-up responses. Bond #4 $1391.66 08/2032 6.75% BBB Last Price Maturity Coupon Rate Analyst Rating Industry Pay Dates Bond #1 $1255.12 10/2029 3.75% AAA Pharmaceutical Apr & Oct Bond #2 $1001.10 05/2048 4.00% AAA Travel/Tourism May & Nov Bond #3 $801.00 01/2035 0%…
- Investors who wish to receive periodic interest income at predetermined regularly stated intervals should purchase which of the following? Select one: a. Treasury stock b. Stock in excess of par c. Stock with a high EPS d. Bonds with a contract rate of interest6. Bond yields and prices over time A bond investor is analyzing the following annual coupon bonds: Issuing Company Annual Coupon Rate Johnson Incorporated 6% Smith, LLC 12% Irwin Corporation 9% Each bond has 10 years until maturity and the same level of risk. Their yield to maturity (YTM) is 9%. Interest rates are assumed to remain constant over the next 10 years. BOND VALUE IS) 1200 1100 B 1000 900 C a00Discuss the risk and return indicated by different bond ratings. Support your answer with references to your research. Use various bond websites to locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Research the differences between the bond ratings, the required interest rates, and the risk. List the websites used as sources for this research. Identify the strengths and weaknesses of each rating.
- how and why interest rates will change over the next three months. Why forecasts of future interest rates are important? You may explain how changes in the factors that cause changes in interest rates influence investors its decisions in the credit markets.Show all workings. Complete the following table and draw a graph showing how bond pricefor each bond changes over time as they move towards their maturitydates. Describe the relationship between bond prices and timeremaining for maturity.YearsreminingtomaturityBOND ACoupon rate = 8% p.a.Market interest rate =6% p.a.BOND BCoupon rate = 6% p.a.Market interest rate =6% p.a.BOND CCoupon rate = 4% p.a.Market interest rate =6% p.a.1098765432101 ) Solve the following quesitons in an Excels spreadsheet, and create a cash-flow table for each Bond A and Bond B over 6 years. a) Calculate the yield rates for two bonds described below. b) Correctly use Rate of Return (ROR) analysis to determine which, if either, bond an investor with a MARR of 10%, should purchase. c) Confirm your answer to part (b) using Present Worth Analysis. Type out formulas used and calculations performed. d) Confirm your answer to part (b) using Annual Worth Analysis. Type out formulas used and calculations performed.
- For the data set Download data set, perform a 3 month moving average to determine the forecast for month 13 (click on the arrow to download the file). Be sure to label the forecasted value for month 13. You must show all work in an Excel file and upload the Excel file. Corporate triple A bond interest rates month rate 1 9.5 2 9.3 3 9.4 4 9.6 5 9.8 6 9.7 7 9.8 8 10.5 9 9.9 10 9.7 11 9.6 12 9.6Required:(i) Calculate the bond durations for Bond A and Bond B respectively using a table format.Show the formulas and workings in each column. (ii) Determine the investment decision based on the market expectation and your answer in part (i) above.All computations must be done and shown manually Question 4 Complete the following table and draw a graph showing how bond price for each bond changes over time as they move towards their maturity dates. Describe the relationship between bond prices and time remaining for maturity. Please include graph as per above information Years remaining to maturity BOND A Coupon. rate = 8% p.a. Market interest rate = 6% p.a. BOND B Coupon rate = 6% p.a. Market interest rate = 6% p.a. BOND C Coupon rate = 4% p.a. Market interest rate = 6% p.a. 10 9 8 7 6 5 4 3 2 1 0
