MT 438 Discussion Questions In Tutorial Library

This is Tutorial details page

TITLE: MT 438 Discussion Questions

CLASS / COURSE: Finance

QUESTION DESCRIPTION:

1). Explain the interaction of interest rate risk and reinvestment rate risk. If you were the fund manager of the mutual fund you investigated at www.fidelity.com, which risk would you be more concerned about, and how would you’re protect yourself?

2). In your own words, can you explain what duration measures? Why is duration important to a bond investor?

3). What impact does the current shape of the yield curve have on anticipated returns in the bond portfolio? (Note: For current yield curve data, go to the following webpage: http://www.bloomberg.com/markets/rates/. Make sure to review your knowledge of the yield curve by rereading pages 462 - 466 of the text.)

4). Post your responses from Web Field Trip 1 to this Discussion thread. Summarize your fund for the benefit of your classmates: what is the name of the fund, what is its trading abbreviation, and what type of securities does the fund invest in? Speculate on the risks an investor would face from buying this fund. How is the fund attempting to minimize the impacts of these risks?

5). Post your responses from Web Field Trip 2 to this Discussion thread. What have the yields and prices been on recent three-month and one-year note auctions? What are TIPS and what are they currently yielding? Why would an investor choose to invest in TIPS?

6). Post your calculation of a bond's intrinsic value from Exercise 1 to this Discussion thread.

7). Post your bond portfolio immunization from Exercise 2 to this Discussion thread.

 

Field trip one

Point your web browser to www.fidelity.com, the home page of the Fidelity family of mutual funds. Click on the 'Investment Products' tab and then click on 'Mutual Funds' on the menu that appears. On the next page, find the area on the left column entitled 'Stock funds, bond funds, international funds, sector funds'. This will take you to bond funds. Listed here is a wide spectrum of mutual funds that invest in bonds and other fixed income securities? Continue clicking until you find a bond fund that interests you. Look at the detail of the fund, and post your responses to the following questions on the appropriate Discussion thread.

Summarize your fund for the benefit of your classmates: what is the name of the fund, what is its trading abbreviation, and what type of securities does the fund invest in? Speculate on the risks an investor would face from buying this fund. How is the fund attempting to minimize the impacts of these risks?

Field Trip 2

Point your web browser http://www.treasurydirect.gov/indiv/indiv.htm.

This is the Treasury Direct website of the US Department of the Treasury. At this site, individual investors can buy treasury securities directly. You can learn about (and trade) Treasury Bills, Notes, and the newer products like Treasury Inflation-Protected Securities (TIPS). Explore the website and answer the following questions on the appropriate Discussion thread.

What have the yields and prices been on recent three-month and one-year note auctions? What are TIPS and what are they currently yielding? Why would an investor choose to invest in TIPS? 

 

SOLUTION DESCRIPTION: Completed Solution is attached. Click on Buy button and then download file to get full solution.

SUBJECTS / CATEGORIES:
1. Finance
2. Financial Management
3. Accounting
4. Corporate Finance
5. Investment and Portfolio Management
6. Business Economics

$10.00 USD

Press BUY button to download solution of this Question.

Buy

Comment

    No comment on this tutorial.