MAF202 Money and Capital Markets – Assignment T1 2013 Assignment due Friday, 17th,May...

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MAF202 Money and Capital Markets – Assignment T1 2013 Assignment due Friday, 17 th ,May 2013 Only Electronic to be submitted no later than 11.59pm Assignment worth 20% Marks will be published on...

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MAF202 Money and Capital Markets – Assignment T1 2013
Assignment due	Friday, 17^th,May 2013 Only Electronic to be submitted no later than 11.59pm
Assignment worth 20% Marks will be published on CloudDeakin	Students to form groups of two (2) minimum or three (3) maximum

Notes on Assignment Submission:

All assignments are to be submitted online in an area provided in CloudDeakin. They are counted as “on time” if submitted by 11:59pm AEST or AEDST on the due date.
When submitting online, you must check that you have submitted work correctly by following the instructions provided in CloudDeakin. This involves completion of the plagiarism statement by the student designated to submit the electronic copy on behalf of the group.Only one copy of the assignment per group is to be lodged.
If you make an error and need to correct your assignment before resubmitting then you can do so, but only before the due date for submission. In the Assignment tool button, you will find the “Submitted” tab. Under “Actions” within this tab, click on the “Take Submission Back to Inbox” icon. Click the “Inbox” tab. Click on the assignment to open it. You then delete the attached file by clicking on the icon next to the file name. From this point you can attach your new file and resubmit your assignment.

Notes on Assignment Requirements:

Students will work in groups of two or three. Individual assignments are not permitted and will not be marked. Once the group is registered on CloudDeakin, the member(s) of group will not be allowed to switch to another group.
Each student will be required to participate in the research, and completion of the set tasks. On the front page of the assignment you should indicate the work done by each student.
The preferred method of referencing is according to the Harvard System. There is no excuse for incorrect referencing. If you use any source you MUST reference it and have in-text citation. That means that within or at the end of the paragraph you will have a reference. You can check what is required here by using student resources online at:
http://www.deakin.edu.au/current-students/study-support/study-skills/handouts/authordate-harvard.php

This assignment requires the preparation of a business report. The assignment represents 20% of the assessment for this unit. It is to be typed (Ariel 12 point) and presented in business report format, including:

A letter of Transmittal (covering letter).
An Executive Summary.
A Table of Contents.
Summary/Conclusion
Referencing using Harvard (Author Date) system.
Reference List and Appendices

For guidance on preparing a Business Report you should refer to a business communication textbook, or the following Deakin Study Support website:
http://www.deakin.edu.au/current-students/study-support/study-skills/handouts/report.php
An example of a business report is shown on the website.
The body of the report should not exceed 2,500 words and should not be less than 2000 words (show the word count at the end of the assignment). A marking guide is shown below to assist you in structuring your report. The guide indicates the tasks to be completed and where marks will be allocated. Please follow the structure
Due Date:
The assignment is due no later than 11:59 pm Friday, 17^stMay, 2013.
Sources of Information:
While the Vineyand Phillips text is a good starting point, you will need to supplement it with research on the internet and various finance journals. You will need to reference APRA, RBA web site,Federal Reserve Bank of US and other central banks as a minimum to source material for the assignment.
Changes in Slope of the Yield Curve and its impact on the Economy
Most of the earlier literature argues that the slope of the yield curve (the spread between long- and short-term interest rates) is a good predictor of future economic activity. The yield curves have been extensively used by investors and policy makers alike as a forecasting tool in real time to better understand the movement in future economic activities.
On the basis of above argument, this assignment is designed to evaluate how changes in yield curvesimpact on an economy. Students are required to select two developed economies (including Australia), compare the shape of their respective yield curves and their impact on the economies of these countries.
More specifically the students will be required to complete the following tasks:
Task1:
Critically examine the different types of yield curves that represent the structure of interest over a period from December 2009 to December, 2011.
Task 2:
The yield curve is said to be a good leading indicator of economic activity. Explain how changes in the slope of the yield curve impact on future economic prospects.
Task 3:
Critically examine the effectiveness of monetary policy responses in the wake of economic and financial stress and how those responses have affected the shape of the yield curve. Refer to recent examples in your answer.
Task 4:
Draw some workable conclusions and Policy implications for investors and policy makers (note: this task is to be completed by all the group members).
Note:
The students are expected to utilize historical data on short term and long term interest rates for treasury securities to develop yield curve and calculate the slope of the yield curves. They are also expected to use economic indicators to make a linkage between the changes in slope of the yield curves and the economic prospects of an economy.

Student Number

Student Name

Task Completed

Assessment Matrix – to be attached to your hard copy assignment
Note: Students to fill in first three columns and provide this information on the front page of their assignment
The Assignment is worth 20% of your final MAF202 mark

Poor	Satisfactory	Good	Excellent	Actual Mark
Letter of transmittal (covering letter) and Executive Summary	0.25	0.40	0.60	0.75
Paper structure: Introduction, Conclusion, Table of contents, appendices etc	0.25	0.50	0.80	0.75
Referencing: Reference List (Harvard System) and citation	0.50	0.60	1.00	1.00
Task 1- Examining the different types of yield curves	= 1.00	2.00	3.20	5.00
Task 2: Changes in Slope of YC and Economic Prospects	= 1.00	2.00	3.20	5.00
Task 3- Monetary Policies responses in the wake of financial crisis and the shape of the yield curve	= 1.00	2.00	3.20	5.00
Task 4- Conclusions and Policy Implications	=1.00	1.50	2.00	2.50
Total	= 6.00	10.50	15.00	20.00

Note: the marks shown in the boxes above are indicative only. The marker may allocate marks either side of an indicative mark. You will receive the following assignment feedback form with your corrected assignment.

005_jnxfajo-kyhdsayp.docx 005_zx5fajo-nhbo2jjb.pptx

Answered Same Day Dec 22, 2021

Robert · Accepted Answer

0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Slope of the Yield Curve  
And 
 Its impact on the Economy 

Presented By 
1. 
2. 
3. 
4.
1 
 
Executive Summary
Yield curves are reflections of present financial market conditions for every economy 
and help to anticipate the entire future interest rates in an economy. Yield curves are also 
notified as the leading indicator of financial market position from time to time along with 
touch towards the interest rate movements. The slope of yield curve I,e spread between 
long-term and short-term interest rates , helps in predicting by and large in all the economic 
activities. Negative signals from yield curve in past has leaded to recession making hue 
and cry in the economic system by and large. It has been observed that, a negative slope 
of the yield curve follows recession and the positive yield curve leads to recovery of 
economy. The negative movements in the yield curve also do help the economist for 
consistent movements in yield curve. Yield curves are used as the bench mark for other 
debts in the market like mortgage rates or bank lending rates. There are times, where the 
yield curve has been used as the predictor for economic growth and output.  
The central bank of every country is worried about the yield curve movements from 
time to time and takes necessary action in case of adverse and unanticipated yield curve 
movements in order to control the situation and tries to maintain a healthy economy in the 
system. The developing economies do take initiations on the interest rate movements in 
order to keep attracting the investments in the country along with initiations towards better 
trade policies. Hence managing the yield curve movements has really become a paramount 
task for every economy. More you watch the movement, better it is for you.
2 
 
TABLE OF CONENT
1. Introduction       ……………………Page 3   
2. Analysis            ………………….. .Page  3 
3. Conclusions      ………………….. Page 8 
4. References       ………………….. Page 9
3 

Introduction  
Yield curve is a line which plot interest rates for a particular point of time for bonds 
having equal better quality with differing maturity dates. Generally the reported yield curves 
are presented for 3-months, 2-year, 5-year and Thirty-year U.S.Treasury Debt. From time 
to time the shape of the yield curve get closely scrutinized   because, an economy gets an 
idea of interest rate movements in the futuristic days in order to understand the interest rate 
change. There are three types of shapes for yield curve namely normal, inverted and flat. In 
case of a normal yield curve, the entire longer maturity yield curves will have a higher yield 
as compared to the short-term maturities due to higher risk associations, which indicates 
running towards recession. For the flat yield curves, where the short term and the long term 
yield curves are very close to each other, gives rise a prediction for economic transition. 
The other observations, which may be made from the interest rate yield curves may be 
noted as, bigger the gaps between the short and long term rates , greater is the slope, 
which is matter of concern going forward.

MAF202 Money and Capital Markets – Assignment T1 2013 Assignment due Friday, 17 th ,May 2013 Only Electronic to be submitted no later than 11.59pm Assignment worth 20% Marks will be published on...

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