Question
1. Please explain the determining factors of the interest rate and make sure to include hypothetical examples for better clarity. 2. Describe the meaning of
1. Please explain the determining factors of the interest rate and make sure to include hypothetical examples for better clarity.
2. Describe the meaning of the yield curve. Verify how the shape of the yield curve provides predictions on the economy in future years. Please visit the US Governments Treasury site, retrieve the data on the U.S. treasury rates and construct the yield curve. Indicate the date of retrieving the data.
3. Please explain the terms associated with the bonds, namely, corporate bond, municipal bond , treasury bill, par value, coupon rate, coupon payment, time to maturity, prevalent interest rate, market value and yield to maturity (YTM).
4. Explain and provide examples of how variations in the prevalent interest rate affects market value of a bond.
5. Explain how you would value a stock. Provide an example of valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.
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