How does it change with maturity and the level of yield

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Reference no: EM131509219

A. Interest rate:

Effect of bond properties on yield, e.g., callable vs. non-callable, convertible vs. non-convertible bonds.

What is interest rate risk? How does it change with maturity and the level of yield?

What does duration measure? How to calculate duration (review HW problem)?

How is time preference related to savings behavior? What is the major finding of the Marshmallow experiment?

What cause changes in supply of funds? Changes in demand of funds? Use loanable funds theory to predict change in equilibrium interest rate (review HW problem)

Term structure:

Historical shapes: when were steep upward-sloping curves and inverted curves usually observed?

Main conclusions of unbiased expectations theory and the liquidity premium theory

How do the theories explain the different shapes of yield curves? Compare the yield curves under the two different theories.

Reference no: EM131509219

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