Interest Rate and Market Risk
INTEREST RATE AND MARKET RISK
For your this assignment you will submit a paper that analyzes interest rate and market risks. Use the following criteria from the Interest Rate and Market Risk Assessment (2) Scoring Guide to address the topics in your paper:
Analyze the relationship between duration and coupon payments with supporting bond duration calculations.
Analyze the process of immunizing a financial institution against the impact of a duration gap.
Write a one-page paper incorporating the above criteria into your interest rate and market risk analysis of financial markets and institutions. Submit your paper in the assignment area.
Resources and citations should be formatted according to APA (6th edition) style and formatting.
Solution Preview
Analyze the relationship between duration and coupon payments with supporting bond duration calculations.
The maturity date security is one of the critical segments in figuring term, just like the security’s coupon rate. On account of a zero-coupon bond, the bond’s extra time to its development date is equivalent to its term. At the point when a coupon is added to the warrant, in any case, the bond’s term number will dependably be not as much as the maturity dates.
(381 words)