Assignment:
Bond Analysis
Response below:
1. Using the Wall Street Journal or Barron's, find the bond yields for Treasury securities with the following maturities: three months, six months, one year, three years, five years, 10 years, 15 years, and 20 years. Construct a yield curve based on these reported yields, putting term-to-maturity on the horizontal (x) axis and yield-tomaturity on the vertical (y) axis. Briefly discuss the general shape of your yield curve. What conclusions might you draw about future interest rate movements from this yield curve?
2. Briefly explain what will happen to a bond's duration measure if each of the following events occur (provide an explanation for only those events listed below): a. The yield-to-maturity on the bond falls from 8.5% to 8%. b. The bond gets one year closer to its maturity. c. Market interest rates go from 8% to 9%. Summarize your findings in a three to-five page paper (excluding title and reference pages). Be sure to show your work.
Your paper must be formatted according to APA style as outlined in the Ashford Writing Center and must include at least two scholarly sources, in addition to the text.