I would like you to answer myassignment by following the details provided.

This assignment requires the preparation of a business report. It is to be typed (Ariel 12 point) and presented in business report format, including:

· A letter of Transmittal (covering letter).

· An Executive Summary.

· A Table of Contents.

· Summary/Conclusion

· Referencing using Harvard (Author Date) system.

· Reference List and Appendices

For guidance on preparing a Business Report you should refer to a business communication textbook, or the following Deakin Study Support website:

http://www.deakin.edu.au/current-students/study-support/study-skills/handouts/report.php

An example of a business report is shown on the website.

The body of the report should not exceed 2,500 words and should not be less than 2000 words (show the word count at the end of the assignment). A marking guide is shown below to assist you in structuring your report. The guide indicates the tasks to be completed and where marks will be allocated. Please follow the structure

Sources of Information:

While the Viney and Phillips text is a good starting point, you will need to supplement it with research on the Internet and various finance journals. You will need to reference APRA, RBA web site, Federal Reserve Bank of US and other central banks as a minimum to source material for the assignment.

Changes in Slope of the Yield Curve and its impact on the Economy

Most of the earlier literature argues that the slope of the yield curve (the spread between long- and short-term interest rates) is a good predictor of future economic activity. The yield curves have been extensively used by investors and policy makers alike as a forecasting tool in real time to better understand the movement in future economic activities.

On the basis of above argument, this assignment is designed to evaluate how changes in yield curves impact on an economy. Students are required to select two developed economies (including Australia), compare the shape of their respective yield curves and their impact on the economies of these countries.

More specifically the students will be required to complete the following tasks:

Task1:

Critically examine the different types of yield curves that represent the structure of interest over a period from December 2009 to December, 2011.

Task 2:

The yield curve is said to be a good leading indicator of economic activity. Explain how changes in the slope of the yield curve impact on future economic prospects.

Task 3:

Critically examine the effectiveness of monetary policy responses in the wake of economic and financial stress and how those responses have affected the shape of the yield curve. Refer to recent examples in your answer.

Task 4:

Draw some workable conclusions and Policy implications for investors and policy makers (note: this task is to be completed by all the group members).

Note:

The students are expected to utilize historical data on short term and long term interest rates for treasury securities to develop yield curve and calculate the slope of the yield curves. They are also expected to use economic indicators to make a linkage between the changes in slope of the yield curves and the economic prospects of an economy.

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Student Number	Student Name	Task Completed

Assessment Matrix – to be attached to your hard copy assignment

Note: Students to fill in first three columns and provide this information on the front page of their assignment

The Assignment is worth 20% of your final MAF202 mark

	Poor	Satisfactory	Good	Excellent	Actual Mark
Letter of transmittal (covering letter) and Executive Summary	0.25	0.40	0.60	0.75
Paper structure: Introduction, Conclusion, Table of contents, appendices etc	0.25	0.50	0.80	0.75
Referencing: Reference List (Harvard System) and citation	0.50	0.60	1.00	1.00
Task 1- Examining the different types of yield curves	≤ 1.00	2.00	3.20	5.00
Task 2: Changes in Slope of YC and Economic Prospects	≤ 1.00	2.00	3.20	5.00
Task 3- Monetary Policies responses in the wake of financial crisis and the shape of the yield curve	≤ 1.00	2.00	3.20	5.00
Task 4- Conclusions and Policy Implications	≤1.00	1.50	2.00	2.50
Total	≤ 6.00	10.50	15.00	20.00

Note: the marks shown in the boxes above are indicative only. The marker may allocate marks either side of an indicative mark. You will receive the following assignment feedback form with your corrected assignment.