Archive for category: Business paper

Reasons for the low and even negative bond yields

This paper focuses on EC3214 Financial Economics II. The Excel file ‘Yield on ten-year Tbills’ in Moodle contains US daily yields on 10-year Treasuries (in percent) for you to verify or to track the data over the period October 2014 to July 2010.

EC3214 Financial Economics II-The Excel file ‘Yield on ten-year

Instructions
The Excel file ‘Yield on ten-year Tbills’ in Moodle contains US daily yields on 10-year Treasuries (in percent) for you to verify or to track the data over the period October 2014 to July 2010. At the bottom of the brief summary, there are some questions that you will need to address in writing the essay.

Make sure that the essay is your own individual work and that you do not use external help. Do not copy from anywhere else. You should include a reference section at the end of the essay, and use an appropriate style of referencing to write it out. Wikipedia is not an acceptable source of reference and you will be penalised for including it in the reference section. Please write clearly, and structure your essay so that it is presentable and flows nicely. Clearly explain any models you refer to and discuss implications of their results.

Low bond yields in the 2010’s

The unconventional monetary policies followed by several central banks since 2008 has led to an increase in the demand for bonds, thus increasing the price of bonds and pushing bond yields much lower than historical average yields. For example, in February 2015 10-year bond yield were 2% in the US, 1.6% in Spain, 0.4% in Germany and Japan and -0.04% in Switzerland.
These low and especially negative bond rates are exceptional and have raised the question as to why bond investors are willing to accept such low bond yields. Unconventional monetary policies (quantitative easing or QE) that push up the demand for bonds and thereby increase bond prices are usually seen as the major reason for the low bond yields (remember the negative relationship between bond prices and bond yields).

Despite these low bond yields, investors have recently earned very favourable returns from bonds. For example, in 2014 the returns from the BlackRock Euro Bond Fund A2 EUR was 11.40%.  The total returns from investing in bonds consist of two parts: the yield on the bond, or the periodic interest rate payments, as well as potential capital gains or losses (selling the bond before maturity at a price higher or lower than the purchase price). In 2014, falling bond yields was the consequence of increased demand for bonds, leading to higher bond prices and thus capital gains for bond investors.

EC3214 Financial Economics II

Address the following issues in your write-up (see instructions above):

Firstly, Discuss some reasons for the low (and even negative) bond yields that prevailed at the beginning of 2015, by investigating themes like: Demographic changes among investors in industrialised nations; Currency gains from exchange rates; Negative Inflation; and Capital Regulations and Liquidity Requirements of institutional investors.

Secondly, Discuss the sustainability of these low bond yields.

Thirdly, Discuss the relationship between bond yields and capital gains that can be earned when investing in bonds. In other words, explain why bond investors earned relatively high total returns on bond funds in 2014, despite the record low bond yields at the time.

Fourthly,  Provide some reasons why bond investors were willing to accept negative bond yields in early 2015.

EC3214 Financial Economics II

Additional Sources/ references that you may want to consult to augment your knowledge

Buttonwood (2015). Accentuate the negative: Why investors would opt to lose money. The Economist January 24, 2015.
http://www.economist.com/news/finance-and-economics/21640373-why-investors-would-opt-lose-money-accentuate-negative

Oliver, S (2019). Global growth slowing, plunging bond yields & inverted yield curves – not terminal but shares are due a pull back. AMP Capital, March 26, 2019. https://www.ampcapital.com/au/en/insights-hub/articles/2019/march/global-growth-slowing-plunging-bond-yields-and-inverted-yield-curves

Bhansali, V and Emons, B (2015). Why the Bond Market Is Yielding Negative and What Negative Yields Mean for You. Pimco.
http://europe.pimco.com/EN/Insights/Pages/Why-the-Bond-Market-Is-Yielding-Negative-and-What-Negative-Yields-Mean-for-You.aspx

Huebscher, R (2015). Gary Shilling – Why You Should Own Bonds. Advisor Perspectives, February 17, 2015.
http://www.advisorperspectives.com/newsletters15/Why_You_Should_Own_Bonds.php

San Francisco Federal Reserve economic research

This is an assignment that discusses the San Francisco Federal Reserve economic research. The paper is essentially for economists and also analysts.

San Francisco Federal Reserve economic research

You are an analyst at the San Francisco Federal Reserve. The regional branches of the Fed all publish bulletins that contain summaries of interesting economic research. The people who read these bulletins are typically economists or other trained analysts who work at the Fed or other government offices; these are individuals who are generally too busy to read academic journal articles but who want to stay on top of the latest research. Your boss has asked you to write a summary (750-800 words = roughly 3-4 pages, 12-point and double-spaced) for the next bulletin of one of the articles from the following list:
One Hundred Years of the Economic Review: The Top Twenty Articles:
http://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.101.1.1
Your summary should have about a paragraph to answer each of the following questions:
What is the key hypothesis tested and what are the empirical findings?
How is the study connected to previous research?
Then, what economic theory/model of behavior do the authors use to form their hypothesis?
Identify, what data do the authors use and what is their empirical strategy (statistical methods/case studies)?
Lastly, what other factors do the authors mention that should be considered in evaluating their results?

Include a word count at the end of your article. Also,  note that if your article is too long, it means you will need to think hard about what can be cut but if your article is too short, you will need to think just as hard about what you might be missing.

Evaluation criteria

I will focus on the following specific areas when grading:
1.     Article content. Most importantly, have you summarized the paper accurately and completely? Have you accurately identified the key question(s) in the paper, and the authors’ answer(s)? Also, have you included all the relevant information so that an uninformed reader would have a clear idea what the article is about?
2.     Voice. Is the tone and style appropriate for this audience?
3.     Overall clarity. I will be evaluating the readability, clarity and style of the paper overall

Business feasibility analysis on industry and market business idea

This is an assignment that focuses on a feasibility analysis on industry and market. The paper also discusses if the business has profit potential.

Feasibility analysis on industry and market

Assignment 2: Feasibility Analysis

“A feasibility analysis is a chance to open your eyes, ask yourself some very tough questions, then check to see whether your idea, as originally conceive, needs to be modified, refocused, or changed dramatically. (Or perhaps even scrapped altogether.)” (Abrams, as cited in Scarborough & Cornwall, 2015, p. 237). With this assignment, you will be addressing the fundamental question: Does this business have profit potential?

Referring to the same business you either started or purchased in the first assignment. Write a three to four (3-4) page paper in which you: Conduct a feasibility analysis in which you research: Industry and Market Feasibility Product or Service Feasibility Financial Feasibility Entrepreneurial Readiness Based on your assessment, does the business idea need to be modified, changed significantly, or abandoned? (Note: If you abandon the business idea, then you will need to select and analyze a new business that has profit potential.) Include at least two (2) references outside the textbook.

Your assignment must follow these formatting requirements: This course requires use of Strayer Writing Standards (SWS). The format may be different than other Strayer University courses. Please take a moment to review the SWS documentation for details. (more information and an example is included in the Strayer Writing Standards left menu link). Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date.

The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are: Describe and analyze the necessary activities and key decisions to start a small business. Use technology and information resources to research issues in small business management. Write clearly and concisely about small business management using proper writing mechanics.

Equity of a company and market economy’s behavior

You now know how to evaluate the equity of a company and analyze the market economy’s behavior. Using this knowledge, you will predict your company’s future behavior through forecasting, identify and describe business opportunities that the company should pursue, and explain the benefits and costs of these decisions.

Equity of a company and analyze the market economy’s behavior

You now know how to evaluate the equity of a company and analyze the market economy’s behavior. Using this knowledge, you will predict your company’s future behavior through forecasting, identify and describe business opportunities that the company should pursue, and explain the benefits and costs of these decisions.

Prompt:

In this milestone, you have two tasks.

Firstly, predict your company’s future behavior through forecasting, projecting its likely performance based on the most recent year of financial information.

Secondly, explain the incremental impact of a hypothetical but reasonable and simple new investment project, such as a new product or facility or a cost-cutting investment, as an initial step in thinking about the future.

Thirdly, to justify your findings and projections, you need to include accurate and relevant data tables that explain how the numbers were informed by existing information and model different scenarios.

Also, Be sure to address the following critical elements:

 Projections:

Firstly, Using what you know about the company’s financial health and performance, forecast its future performance. In particular, you should:

A. Project the company’s likely consolidated financial performance for each of the next three years. Support disaggregation’s to help inform decisions.

B. Modify your projections for the coming year to show a best- and worst-case scenario based on the potential success factors and risks you identified. As with your initial projections, support your analysis with an appendix spreadsheet, specifying your assumptions and including relevant calculations and disaggregation beyond those in the existing financial reports.

C. Further, Discuss how your assumptions, forecasting methodology, and information gaps affect your projections.

Additionally, Why are your projections appropriate?

For example, are they consistent with the company’s mission and priorities? Aggressive but achievable? How would changing your assumptions change your projections?

Business strategy and forecasting used in companies

This is a paper discussion on Business strategy and forecasting used in companies. The paper is analyzing the steps involved in forecasting from a business perspective.

Business strategy and forecasting used in companies

Please answer each of the 5 questions in 1 page each, accurately and comprehensively. Remember that the paper is analyzing your critical thinking as well.

Firstly, Why is a good strategy so important, especially at high-tech companies? Why is crafting a good strategy so difficult?  Discuss some examples of strategies that have been implemented before by various companies. Were they successful or not? What are some of the pitfalls that a CEO needs to watch out for when crafting and implementing a strategy?

Secondly, choose an industry with a clear leader, then examine the differences between the leader and one or two of the other competitors in the industry. What are the roles of the leader in the organization? How do the strategies differ? What have the leaders done differently?

Thirdly, conduct a research and identify an example of a company that is launching a new product or service. Identify whether the company seems to be emphasizing ways that it has lowered costs (and will compete on the basis of price) or ways that it is adding features (and will compete on the basis of uniqueness). Or, does the company seem to be trying to do both? Are there companies that have used both methods?

Thirdly, explain the forecasting technique or method. Then, describe the steps involved in forecasting.  Give three examples showing why a business needs to forecast. Ensure you provide forecasting in detail while explaining the steps.
Describe the steps involved in forecasting used by current organizations.  Give three examples from your life in which you made a forecast of the future.  Were your correct in your predictions?