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Deutsche Bank: Finding Relative-Value Trades On August 15, 2003, members of the Deutsche Banks Fixed Income Research Group are looking at data for the day

Deutsche Bank: Finding Relative-Value Trades On August 15, 2003, members of the Deutsche Banks Fixed Income Research Group are looking at data for the day on various US Treasury Bonds. They want to compare the output of their theoretical term-structure model with the bootstrapped zero-coupon yield curve. The comparison will reveal if there are any possible mispricingsand thus tradesin US Treasury Bonds. Explain the role of the fixed income research group. Calculate yields for the coupon paying US treasuries given in the case. Bootstrap zero coupon (spot) yield curve from the given coupon paying bonds. Is there an arbitrage opportunity? Show it. Michael Milken: The Junk Bond King Was Milken singled out for being a maverick who had created a market outside the confines of Wall Streets traditional boundaries? Or, was there something fundamentally wrong with the way he had structured and operated the junk bond market? In 2 pages report answer the previous question and explain his investment philosophy

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