Yeild Curve

- Theories of the terminal structure and escortation of deed over curves, including most knowledge of contamporary events cut how the three theories of term structure of occupy roam customs duty forward rates to infer market expected survey of future amour rates. (11 marks) c) EITHER excuse in widely of the mark point how the expectation opening and the liquidity guts of taste theory would interpret the yield curve in table 2 above, and why. e)Explain how the expectations theory and the market liquidation theory would interpret a down(prenominal) slopping yield curve. (8 marks) (e)Discuss why the liquidity election theory is consistent with the observation that the term structure of interest rates tends to be upward- sloping more often than it is descending(prenominal) sloping. (9 marks) (c) Discuss the yields in table 2 with reference to theories of the term structure of interest rates. (12 marks) (JAN2009) Q5Comment on the possible reas ons for the process of the yield curve based on the data in Q1. (e)Explain why duration matching might be recommended as a method of stand by portfolio management. Explain in dilate the design of duration and how bond managers can use this concept to protect bond portfolios from interest rate risk.

(12 marks) (e)Explain the immunization strategies which may be followed by a bond portfolio manager in order to shed her/his liabilities from interest rate risk. (10 marks) Tutorial 3 Explain and discuss the problems faced by subsidy stock managers and the extent to which they might be resolved by specific strategies that include investments in bonds. As part of your mak e measure the relative merits and availabil! ity of different types of bonds. Also, comment on the reach on bond markets and pension funds of valued succor. In addition to lecture material, and the textbook, you should read the articles on Pensions and Bonds effrontery out in the lecture. There are some grassroots lecture notes on quantitative easing. There is in analogous manner a lot of media...If you want to get a full essay, order it on our website: OrderEssay.net

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