Reference no: EM13980729
Interest Rates and Debt Securities Assessment
You will develop an assessment in which you address the following problems/questions:
Form a discussion on the possible determinants of market interest rates. For each determinant offer illustration for when that determinant may tend to be either stronger or weaker and what is the driving force for that differential impact. For example, when would the default risk premium be stronger verse weaker and what seems to be the drivers to that stronger or weak impact?
Present and explain the yield curve. Present the three main type of yield curve with regard to shape. Illustrate with numerical examples how future inflation impacts they yield curve.
Describe the different types of debt securities. This should be a list of the various securities in each class along with relevant information that defines each security.
Develop a valuation model for the long-term corporate bond with a face value at maturity of $100,000, a maturity of 10 years, a coupon interest rate of 6%, and a market yield of 8%. The coupons are assumed to be paid semi-annually. In your development and presentation, include a time line showing the relevant cash flows along with all of the steps that allow you to generate the value (price of the bond).
Given the problem above, identify how the bond price will be expected to adjust across time as the bond approaches maturity. You should calculate the price after each 2-year period has passed – i.e., after year 2, year 4, year 6, year 8 and year 10. Graph the resulting movement in the price across time using the resulting values. Explain how this movement in the bond price across time is important for the investor.
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Annual coupon bond with a face value
: Consider an five-year, 12 percent annual coupon bond with a face value of $1,000. The bond is trading at a rate of 9 percent. What is the price of the bond? If the rate of interest increases 1 percent, what will be the bond’s new price?
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The net profit margin is
: You are given the following financial data for Company A: Cash = $6,000; inventories = $1,000; accounts receivable = $700; other current assets = $500; long-term assets = $1,000; accounts payable = $800; other current liabilities = $4000; net income ..
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Description of the disease or condition
: The infographic should contain the following: A description of the disease or condition. Data on incidence and prevalence presented in graphic form
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What is angle between emerging ray and normal to interface
: Where does the laser beam emerge from the block and what is the angle between the emerging ray and the normal to the interface?
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Describe the different types of debt securities
: Form a discussion on the possible determinants of market interest rates. For each determinant offer illustration for when that determinant may tend to be either stronger or weaker and what is the driving force for that differential impact. Describe t..
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What unique attributes of any culture are worth preserving
: What of value will we gain from shifting to that global view of an interdependent world? What will we lose? What unique attributes of any culture are worth preserving? Why
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How the npv new and change in npv is calculated
: We are evaluating a project that costs $644,000, has an eight-year life, and has no salvage value. Assume that the depreciation is straight-line to zero over the life of the project. Sales are projected at $70,000 units per year. how the NPV new and ..
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What unique attributes of any culture are worth preserving
: What of value will we gain from shifting to that global view of an interdependent world? What will we lose? What unique attributes of any culture are worth preserving? Why
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What is the duration of a two-year zero-coupon bond
: What is the duration of a two-year bond that pays an annual coupon of 11.6 percent and has a current yield to maturity of 13.6 percent? Use $1,000 as the face value. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? U..
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