MBAD6234 Financial Markets Assignment
Task QuestionsExcel knowledge entry and modeling shouldn't be launched at this late stage of the course, so a few of these questions contain solely easy calculations and interpretation of Excel calculations already carried out for you. MBAD 6234 Monetary Markets will use Excel extensively, so plan for a while to observe Excel if it is advisable. ‘Customized Excel Tutorial.xls’ is posted on the Bb Syllabus web page for that objective.#1– Clarify the calculations in every of the three panels under, separately. Clarify the aim of the calculation and the process of the calculation, i.e., how the information inputs decide the output – the end result. Bond Questions Assist Sheets.xlsx (posted on Bb project web page) has ‘live’ sheets so you may see how the calculations work.purchase at par BOND CASH FLOWS 1994 1995 1996 1997 1998Buy Worth -1000 Curiosity 102.5 102.5 102.5 102.5Sale Worth 1000Sum -1000 102.5 102.5 102.5 1102.5YTM 10.25% purchase at low cost BOND CASH FLOWS 1994 1995 1996 1997 1998Buy Worth -900 Curiosity 102.5 102.5 102.5 102.5Sale Worth 1000Sum -900 102.5 102.5 102.5 1102.5YTM 13.66% purchase at premium BOND CASH FLOWS1994 1995 1996 1997 1998Buy Worth -1100 Curiosity 102.5 102.5 102.5 102.5Sale Worth 1000Sum -1100 102.5 102.5 102.5 1102.5YTM 7.28% #2– Clarify the calculations in every of the 2 panels under, one at a time. As in #1, think about the inputs and output – the outcomes. Then, clarify the distinction between the 2 panels. Use Bond Questions Assist Sheets.xlsx, as for #1 above.#Three- Decide the yield to maturity on a 10-year 6% bond promoting at par if the going price (present rate of interest for newly issued bonds of the identical high quality ranking) is 6%? This can be a suppose query; not a calculation query. Briefly clarify the way you reached your reply.#Four- If Treasury bonds are danger free, why is there a normal deviation round their imply price of return? Refer to the desk on web page 17 of this PDF. HINT: Study the blue treasury rate of interest development within the chart on web page Four.#5– Your pension fund has a sub-portfolio of bonds. The period of this bond portfolio is eight years. The present market worth of the bond portfolio is $1,000,000. Calculate the worth change anticipated on the bond portfolio if curiosity charges rise from their present stage of 5% to 7%, and focus on whether or not or not that is an instance of rate of interest danger.#6- Clarify in a single sentence why the period on a zero coupon bond is the same as its maturity.