I need some help!  Part 1 Discussion Question In Chapters 5 , 6, and 7 of Ross, et al (2022) textbook you learned about the

I need some help! 

Part 1 Discussion Question

In Chapters 5 , 6, and 7 of Ross, et al (2022) textbook you learned about the concept of time value of money and how it is applied for bond valuation. View the following YouTube videos:

· Time Value of Money TVM Lesson/Tutorial Future/Present Value Formula Interest Annuities Perpetuities. (2014). [YouTube Video]. In YouTube.


· Chapter 7 : Interest Rates and Bond Valuation. (n.d.). Www.youtube.com. Retrieved July 19, 2022, from


Once viewed discuss the following with your peers:

Toyota Motor Credit Corporation (TMCC), a subsidiary of Toyota Motor Corporation, offered some securities for sale to the public on March 28, 2008. Under the terms of the deal, TMCC promised to repay the owner of each security $100,000 on March 28, 2038, but investors would receive nothing until then. Investors paid TMCC $24,099 for each of these securities; so they paid $24,099 on March 28, 2008 for the promise of a $100,000 payment 30 years later.

· Why would TMCC be willing to accept such a small amount today ($24,099) in exchange for a promise to repay about four times that amount ($100,000) in the future?

· A feature of this particular deal is that TMCC has the right to buy back the securities on the anniversary date at a price established when the securities were issued. What impact does this feature have on the desirability of this security as an investment?

Part 2 Bond Valuation Assignment

Based on the content covered in Week 5 and Chapters 5, 7 and 7 of the Ross, et al. (2022) text, students learned about time value of money and its application to bond valuation. Students should address the following:

Two bonds A and B have the same credit rating, the same par value, and the same coupon rate.

Bond A has 30 years to maturity and bond B has 5 years to maturity.

1. Explain which bond will trade at a higher price in the market and why?

2. What happens to the market price of each bond if the interest rates in the economy go up? Elaborate on your rationale.

3. Which bond would have a higher percentage price change if interest rates go up? Explain.

4. Substantiate your argument with numerical examples.

As a bond investor, if you expect a slowdown in the economy over the next 12 months, what would be your investment strategy?For this assignment, create a PowerPoint presentation and record yourself presenting your answers to the questions above in a 5-7 minute video. Use at least two credible sources to support ideas for your presentation.

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Consider the instructions for drafting the Research Method Rationale section of the Prospectus. Draft a Rationale to support “Diversity in State

Consider the instructions for drafting the Research Method Rationale section of the Prospectus. Draft a Rationale to support “Diversity in State Government Leadership” using qualitative research.    The rationale should be thorough and well-cited, with appropriate scholarly research guides or specific scholarly research you have sourced as a particular method

Instructions in file attached. 1. Go to: h ps://login.pearson.com/v1/piapi/piui/signin?client_id=dN4bOBG0sGO9c9HADrifwQeqma5vjREy&oku rl=h

Instructions in file attached. 1. Go to: h ps://login.pearson.com/v1/piapi/piui/signin?client_id=dN4bOBG0sGO9c9HADrifwQeqma5vjREy&oku rl=h ps:%2F%2Fmycourses.pearson.com%2Fcourse-home&siteid=8313 2. Click on course “QMB4680” 3. On the Le Menu click on “Assignments” 4. Complete – Quiz #2 Ch. 12 – 15 (4 ques ons) 5. DO NOT Submit Quiz Maria Fernandez Highlight

 Considering the diversity in state government leadership and the various ethical issues associated with human subjects research, describe what your

 Considering the diversity in state government leadership and the various ethical issues associated with human subjects research, describe what your target sample subjects might perceive as the risks for participating in your study. Briefly describe the following: Your targeted sample The anticipated risks from the subject’s perspective Your strategies for