Suppose you work as a junior analyst in one large Australian mining firm, which mainly export coal
Question:
Suppose you work as a junior analyst in one large Australian mining firm, which mainly export coal to Japan. The company has 100 million dollars to invest for up to 10 years in a financial instrument. Your boss, who knows a lot about finance, ask you to investigate the possibility to invest the full amount in one or more 10 year-bonds (for one or different countries) to diversify the risk of being totally exposed to the Japanese economy. Your task is to write a report about 10 years government bonds (you can choice one or more of the countries/bonds in the data folder) and provide a recommendation for the company to invest (for example 30% in bond of country X and 20% on bonds of country Y, etc...). Other investments such as share will not be considered for the company.
This is a great opportunity to test your understanding of this financial instrument and understand what factors you should consider for this investment.
Fundamentals of Investments Valuation and Management
ISBN: 978-0078115660
7th edition
Authors: Bradford Jordan, Thomas Miller