Expert Answer:METAD 712 2 Financial Markets & Institutions Bond


Solved by verified expert:Please look at the 2 files.One is about 2 problems of bond pricing calculations,the other one is about searching current interest rates.I think it could be finished in 3 hours.


Don't use plagiarized sources. Get Your Custom Essay on
Expert Answer:METAD 712 2 Financial Markets & Institutions Bond
Just from $10/Page
Order Essay

Unformatted Attachment Preview

Financial Markets & Institutions
Interest Rate Exercise
Homework Exercise 1
What are the current interest rates for the following?
Source of
Short Term Rates / Money Market
30 Day / 1 month T-Bills
90 Day / 3 month T-Bills
1 Yr. T-Bills
US Commercial Paper (indicate term)
Overnight Repos
Federal Funds (indicate term)
Eurodollar Deposits (indicate term)
Euro CP (indicate term)
US Discount Rate
LIBOR (US$) (indicate term)
EURO LIBOR (Euribor) (indicate
Long Term Rates / Bond Market
5 Yr. Treasury Notes
10 Yr. Treasury Notes
30 Yr. Treasury Bonds
5 Yr. TIPS (Treasury Inflation
Protected Securities)
US Agency Bonds, e.g. Fannie Mae,
Freddie Mac, Ginnie Mae
US Corp Bonds – Investment Grade
US Corp Bonds – High Yield / Junk
Muni Bonds
Note the source(s) for your information. Also, you may want to indicate the term for bond rates if you find
that the rates differ significantly depending on the maturity.
Plot the Yield Curve for US Treasuries. Putting Maturity on the X-axis and Yields on the Y-axis [ Suggest
you use the Charting function in Excel and select the Scatter option ]
From the data above
30 Day / 1 month T-Bills
90 Day / 3 month T-Bills
1 Yr. T-Bills
5 Yr. Treasury Notes
10 Yr. Treasury Notes
30 Yr. Treasury Bonds
Financial Markets & Institutions
Bond Pricing Exercise
Homework Exercise 2
1) Calculate the Value of the Bonds under the following assumptions:
Assume that the principal amount for all bonds is $1000 and that interest is paid
Period 1
Period 2
Initial Market Interest Rate = 3%
Maturity (in Years)
Market Interest Rate changes to 4%
Maturity (in Years)
Coupon Rate
% Change in Value from Period 1 to 2
3 Yr
3% coupon
4% coupon
5% coupon
15 Yr
2) What do you conclude about the relative sensitivity of bond prices to changes in
interest rate?
a) Longer maturities relative to shorter maturities?
b) High coupon bonds relative to lower coupon bonds?
3) An individual investor is considering two possible bonds. A Corporate Bond provides
a current yield of 6%. A Municipal Bond provides a current yield of 3.5%. The investor
pays a marginal federal tax rate of 30%. (Ignore state or city income taxes for this
What is the effective AFTER TAX yield on the Corporate Bond
b. What is the effective AFTER TAX yield on the Muni Bond?
c. If the investor paid a marginal tax rate of 25%, which investment would
provide a higher after tax yield? If the marginal tax rate were 35%?

Our essay writing service fulfills every request with the highest level of urgency.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 30% with the discount code ESSAYSHELP