Project instructions:
Interest rates do fluctuate, and predicting interest rate changes is an important, yet challenging aspect of a financial manager’s job.
Explain the Treasury yield curve by using the “Illustrative Treasury Yield Curves” (Figure 6-5) in your text, Fundamentals of Financial Management. Refer to the Table
6.5a
Using one of the items below, construct your own yield curve (similar to Figure 6-5). The maturities must be 1, 5, 10, 20, and 30 years as used in Figure 6-5; however,
the rates will vary depending on which item you select. No more than three students may select the same item or prepare a yield curve on a similar company. The data
you need to construct your yield curve can be found on the following Web sites:
Projected inflation rates can be found on the Internet. Make sure your source is reliable. Here is one recommended source for short-term projections:
Additional helpful sources for calculating the rate of inflation or CPI are:
Helpful information on yield curves can be found on the following Web sites:
Your yield curve can be constructed based on any one of the following:
The US Treasuries
Composite Bond Rates
Corporate Bonds from:
General Motors
Alcola, Inc
Bell Telephone
Wal Mart
May Department Stores
Nabisco
Safeco
Bank of America
Dillards
Ford Motor
Federal Home Loan Mortgage Corp
Build your yield curve using Microsoft PowerPoint and post a single slide as an attachment to this. In your posting, explain what you learned about predicting interest
rates using yield curves. How did your institution or company differ from expectations prior to seeing the yield curve?
The post Interest rates do fluctuate, and predicting appeared first on My Assignment Online.