BUS655 Week Four

BUS655 Week Four Grading Rubric

Assignment: Bond Analysis

Address the following two discussion questions from Chapter 11 of your text:

1. Q11.2. Using the Wall Street Journal or Barron’s, find the bond yields for Treasury securities with the following maturities: three months, six months, one year, three years, five years, 10 years, 15 years, and 20 years. Construct

a yield curve based on these reported yields, putting term-to-maturity on the horizontal (x) axis and yield-to-

maturity on the vertical (y) axis. Briefly discuss the general shape of your yield curve. What conclusions might

you draw about future interest rate movements from this yield curve?

2. Q11.5. Briefly explain what will happen to a bond’s duration measure if each of the following events occur (provide an explanation for only those events listed below):

a. The yield-to-maturity on the bond falls from 8.5% to 8%. b. The bond gets one year closer to its maturity. c. Market interest rates go from 8% to 9%.

Summarize your findings in a three to-five page paper (excluding title and reference pages). Be sure to show your work.

Your paper must be formatted according to APA style as outlined in the Ashford Writing Center and must include at least

two scholarly sources, in addition to the text.

2

Grading Criteria

Bond Analysis 8 Points

Content Criteria Weight

Correctly constructs a yield curve and discusses the general shape of it.

1

Provides conclusions about future interest rate movements from the yield curve.

1

Explains what will happen to a bond’s duration measure for each of the following events:

a. The yield-to-maturity on the bond falls from 8.5% to 8%. b. The bond gets one year closer to its maturity. c. Market interest rates go from 8% to 9%.

3

Writing Skills

The written assignment demonstrates correct grammar, spelling, and punctuation.

.5

Research Criteria The written assignment provides at least (2) scholarly sources, in addition to the course text.

1

Style Criteria

The written assignment is three- to- five double-spaced pages in length (excluding the title and

reference pages).

1

The written assignment is formatted according to APA style as outlined in the Ashford Writing

Center.

.5