Question
Bond Analysis (1 2 pages) The topic of this part of the assignment is covered in Week 3. In this part of the assignment you
Bond Analysis (1 2 pages) The topic of this part of the assignment is covered in Week 3. In this part of the assignment you will analyse one of ANZ's outstanding bonds. Firstly, compute the credit spread of this bond, by comparing the yield-to-maturity on this bond with the yield on Treasury Bonds of comparable duration. (For information on current US treasury yields, go to Yahoo Finance, and type treasury yield. For AUS yields see the RBA website and look for Capital Market Yields Government Bonds Monthly). Secondly, estimate the bonds price one year from now (assuming that interest rates remain constant), and comment on the reason behind the expected price change (if any) from the current price of the bond. Finally, provide a credit rating for the firms bonds, based on your analysis of the company bond, as well as your analysis in Part B of the assignment, and explain why you have given this rating.
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