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Homework answers / question archive / Assess Bond Pricing and Analysis to Build a Portfolio     Examine some important theories and concepts associated with interest rates

Assess Bond Pricing and Analysis to Build a Portfolio     Examine some important theories and concepts associated with interest rates

Accounting

Assess Bond Pricing and Analysis to Build a Portfolio

 

 
Examine some important theories and concepts associated with interest rates. Safe investments usually have fixed interest rates. You have been asked to assemble this presentation for a weekly staff meeting, so your audience will be senior managers and a couple of vice presidents. Note their interest in this topic is very high so you need to be very succinct and clearly explain the risks and rewards of building a successful portfolio. In reference to term structure, interest rate risks, and duration supported by numerical illustration where applicable, in a PowerPoint presentation, evaluate the following:

 

  1. The pricing of bonds, the calculation of the bond yield, and how bond prices adjust across time for premium, par, and discount bonds.
  2. An evaluation of the yield curve and the theories to explain the shape. Discuss how these theories can be helpful in bond investing.
  3. The interest rate risk for bond investments. Form a graphical presentation of the concepts.
  4. The concept of duration and how it is useful in the context of bond portfolio analysis. You want to clearly discuss both the price risk measurement value for duration as well as how duration can measure the dynamics of price and re-investment rate risk across time for a bond portfolio.
     

It is critical that with each discussion above that examples are formed to illustrate the concept. Whenever possible, you want to demonstrate concepts using graphical approaches.
 

The required length of the PowerPoint Presentation option for this assignment is 12 slides (with a separate reference slide). Your presentation MUST include notes that contain 100-150 words per slide (this is your script). Be sure to include citations for quotations and paraphrases with references in APA format and style. Save the file as a PPT file with the correct course code information in the name.

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