Explanation of most accurate measure of the interest rate
Macroeconomics
Calculating Bond Prices and Interest Rates
Introduction: Securities (stocks and bonds) are one of the primary vehicles for investment. In this assignment, you will research interest and yield rates and report on your findings. This paper is designed to familiarize you with performing research on issues pertaining to money and banking so that you can perform more complex research and analysis in subsequent assignments.
Tasks:
Using a major newspaper such as the Wall Street Journal, the Financial Times, or the New York Times as a resource, select two Treasury securities of different maturities and prepare a report on bond prices and interest rates.
The report should contain the following information:
1. Type of financial instruments, such as short-term T-bills
2. Coupon rate, maturity date, actual price, and yield to maturity for each of the two instruments
3. Calculation of the discount yield and current yield for each of the instruments
4. Analysis of how the difference between the current yield and yield to maturity is related to the maturity of the instrument
5. A brief explanation of the most accurate measure of the interest rate
