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BONDS PERFORMANCE ANALYSIS AND INTEREST RATES TRENDS
The information on bonds ca
BONDS PERFORMANCE ANALYSIS AND INTEREST RATES TRENDS
The information on bonds can be found on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.
Another useful website on bond information is https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.
Find the quotes of 2 corporate bonds that contain the Price under “Last Sale” and Ratings of Moddy’s and S@P500. Not all companies have the bonds listed on this website. You can use the bonds of the same company or choose different companies. Choose the bonds with different maturities, different coupon payments. Be creative!
– Copy the bonds quotes into your project. (To grade your project your professor needs to see the information on the bonds you chose)
– How much are the annual coupon interest payments for these bonds?
– How much is the YTM listed in the quotes of the bonds (in the Last Sale column – Yield) (no calculations are required for this question).
– When do these bonds mature?
– Calculate the Macaulay duration and Modified duration of these bonds. You should use on-line Duration calculator. https://dqydj.com/bond-duration-calculator/. Present the results of your calculations in your posting. How the changes of interest rates will affect the bonds’ prices?
– Go to the Internet and find the forecast of interest rates (short-term and long-term). Create the forecast of the bonds’ prices using Modified duration you calculated and forecast of the interest rates. Explain your results.
Also, answer the flowing questions:
– If you are going to buy a bond, which bond would you choose? Why?
– Are there any connections between economic trends analysis, bond market performance, and investment decisions? Please explain your answer.
– Take a look at the balance sheet and income statement of the companies. What data or ratios support your decision to buy this bond or not?
– Reflection – the students also should include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.
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