Bond analysis using Bloomberg data Assume that you want to buy a bond of Oracle Corporation...

 

Transcribed Image Text:

Bond analysis using Bloomberg data Assume that you want to buy a bond of Oracle Corporation (ticker symbol is ORCL) on 20 May 2021. Using data from Bloomberg to answer the following questions (remember to cite all sources you use using the APA style): a) Find and view the bond's yield and spread analysis at a Bloomberg terminal. Save the screenshot of Bloomberg information of the ORCL bond and insert it to your assignment. Summarise how this ORCL bond is valued on the day you access the information. b) Calculate the total amount (invoice price) you would have to pay for this bond if you purchased the issue to settle on 20 May 2021. c) Separate the total invoice amount into (i) the bond's current "flat" price and (ii) the accrued interest (AI). Bond analysis and Portfolio Management Strategies Macaulay duration, Modified Duration, and Duration-adjusted price change Assume a five-year bond with a face value of $100 that pays a 6% coupon (annual coupon payment) with a yield to maturity (YTM) of 8%. Calculate: a) Macaulay duration and discuss your result. b) Modified duration and discuss your result. c) Duration-adjusted price change, if YTM decreases from 8% to 6%, and discuss your result. Investment environment and portfolio management Choose any country on https://tradingeconomics.com/bonds, and click to view the last 5 year history of the 10 year Government Bond. Answer all the questions below and remember to cite all sources you use using the APA style (maximum of 150 words per question): a) Copy and paste the 5-year graph to this assignment. Evaluate the YTM movement over the 5-year period. b) What was the country's Moody's credit rating over the 5-year period? Describe any changes in the credit rating. c) What would have happened to your portfolio's value if you purchased the bond at the start of the period? Would you consider the bond a good investment if you purchased it on 15 January 2021? | 3 Bond analysis using Bloomberg data Assume that you want to buy a bond of Oracle Corporation (ticker symbol is ORCL) on 20 May 2021. Using data from Bloomberg to answer the following questions (remember to cite all sources you use using the APA style): a) Find and view the bond's yield and spread analysis at a Bloomberg terminal. Save the screenshot of Bloomberg information of the ORCL bond and insert it to your assignment. Summarise how this ORCL bond is valued on the day you access the information. b) Calculate the total amount (invoice price) you would have to pay for this bond if you purchased the issue to settle on 20 May 2021. c) Separate the total invoice amount into (i) the bond's current "flat" price and (ii) the accrued interest (AI). Bond analysis and Portfolio Management Strategies Macaulay duration, Modified Duration, and Duration-adjusted price change Assume a five-year bond with a face value of $100 that pays a 6% coupon (annual coupon payment) with a yield to maturity (YTM) of 8%. Calculate: a) Macaulay duration and discuss your result. b) Modified duration and discuss your result. c) Duration-adjusted price change, if YTM decreases from 8% to 6%, and discuss your result. Investment environment and portfolio management Choose any country on https://tradingeconomics.com/bonds, and click to view the last 5 year history of the 10 year Government Bond. Answer all the questions below and remember to cite all sources you use using the APA style (maximum of 150 words per question): a) Copy and paste the 5-year graph to this assignment. Evaluate the YTM movement over the 5-year period. b) What was the country's Moody's credit rating over the 5-year period? Describe any changes in the credit rating. c) What would have happened to your portfolio's value if you purchased the bond at the start of the period? Would you consider the bond a good investment if you purchased it on 15 January 2021? | 3