Concept of yield spreads, Financial Management

Assignment Help:
  • The Central Bank is an authority responsible for monetary policy of its country. It regulates money supply and credit, issues currency, and manages exchange rate.  It strives to maintain the stability of its national currency and money supply. It works with different policy tools like open market operations, bank reserve requirements, interest rate policy, capital requirements, exchange requirements, etc.

  • Treasury yield curve is the curve pertaining to treasury securities. It is the most common yield curve used as a base rate for its high liquidity and riskless nature.

  • Yield spread can be measured in terms of either absolute yield spread or relative yield spread. A yield spread between any two bond issues can be easily computed when the maturity date for both these issues is same.

  • Liquidity spreads are the spreads visible in the secondary markets for treasury securities. On-the-run treasuries are the treasury securities wherein the liquidity spread is more visible by virtue of its less liquidity and frequent trading in the secondary markets.


Related Discussions:- Concept of yield spreads

Analysis of operations, You must analyze the operating performance of your ...

You must analyze the operating performance of your company. You will use ratio analysis and primarily using Liquidity, Profitability and Working Capital ratios. You will use a g

Principle of opportunity cost, Suppose you have recently been contracted as...

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

Define the explicit cost of capital, Define the Explicit cost of capital ...

Define the Explicit cost of capital Explicit cost of retained earnings that involve no future flows to or from firm is minus 100 per cent. This must not tempt one to infer that

Financial statements of home retail group, Briefly outline the necessities ...

Briefly outline the necessities of the UK version of ISA 700/ 750/ 706 and discuss the factors which would manipulate you as the external auditor in forming an opinion on the finan

Propose which investment plan, Problem There are two investment plans i...

Problem There are two investment plans in the market whose details are given below based on which you need to decide which investment plan you need to select. Propose which inv

Laspeyres method, Laspeyres Method Laspeyres method uses the quantities...

Laspeyres Method Laspeyres method uses the quantities consumed during the base period in computing the index number. This method is also the most commonly used method which inc

Example on cash flow diagram, (a) A usual cash flow diagram will incorporat...

(a) A usual cash flow diagram will incorporate the following. If you are short the CDO and then you receive a fixed amount at the initial point t o . After that you make paymen

Plan for financial management, 1. Review and analyse financial data for the...

1. Review and analyse financial data for the last year to establish areas which have generated a profit or loss in your organisation. 2. Conduct a research to review reasons for

APC 308, the importance of a balanced capital structure and the problems wh...

the importance of a balanced capital structure and the problems which are associated with high levels of gearing

How much your investments will be worth at retirement time, Suppose you are...

Suppose you are planning to make regular contributions in equal payments to an investment fund for your retirement. Which formula would you use to figure out how much your investme

Write Your Message!

Captcha
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