Suppose you work as a junior analyst in one large Australian mining firm,which mainly export coal to Japn. 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 choose one or more countries/bonds in the data folder) and provide recommendations for the country to invest (for example, 30$ in bond of country X and 20% in bond of country Y, etc...) other investments such as share would not be considered for the company.

Question 1: What is the general introduction and characteristics of this investment (10- year government bonds)

Question 2: use the data in the file: 10 year bond.xls to construct a table of the correlation amongst each pair of all 10-year bond yield,describe your results and investigate why some countries yield are very high correlated.