Evaluating Bonds Assignment Directions
Choose a category of bond, such as municipal, corporate or investment grade, or junk, and select two bonds to evaluate.
Using one of the three bond rating agencies named in this lesson, analyze what the rating experts have said. Then select two bonds in the same category and take current market price information and bond yields, which can be found in the Wall Street Journal or on Bloomberg, and apply the Net Present Value assessment.
Submission Requirements
Once you have completed this exercise, you will have enough information to make a client recommendation. Your report should be at least two pages, single-spaced, as you will need to show the NPV calculation for both bonds, as well as the sources of the information, and write at least a one paragraph conclusion on why you made your selection for each one or why you chose one over the other. Your work must demonstrate each of the three components: research, practicing the net present value computation, comparison analysis of like investments, and synthesis and communication to your customer.
Question # 1
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Submit your project evaluating two bonds.